You then get the chance to "redeem" your home by paying off the tax debt within a limited time. But if you don't redeem by the deadline, you'll lose ownership of the property.
Again, if you don't pay your property taxes, the past-due amount becomes a lien on your home. Each state has a different tax sale process to collect delinquent taxes.
In some places, the taxing authority sells the home if the homeowner doesn't pay off the debt. But the purchaser might not get the deed to the property right away. Sometimes, a redemption period must expire before the buyer receives the deed.
In other places, the taxing authority sells the tax lien, and the purchaser must foreclose or use different procedures to get a deed to the property.
Arizona is considered a tax lien state.
And sometimes, a tax foreclosure process is used, or the taxing authority simply executes its lien by taking title to the home.
In Arizona, the winning bidder at a tax lien sale gets the right to collect the delinquent tax amounts from you. Eventually, the lien purchaser can get title to the home through a foreclosure if you don't get caught up on the past-due amounts.
If no one bids on the lien at the sale, the county treasurer transfers the lien to the state.
Under Arizona law, you get a limited amount of time, called a "redemption period," during which you can pay off the tax debt after the lien sale. Otherwise, you could lose your home.
If someone buys the lien at the tax sale, you get a three-year redemption period to pay off the debt. (Paying off the debt is called "redeeming" the property.) (Ariz. Rev. Stat. § 42-18152.) After three years pass, if you haven't paid the debt, the purchaser of the lien can file a lawsuit in court to foreclose your right to redeem and get title to your home.
Even after a foreclosure starts, under Arizona law, you can still redeem up until the delivery of a treasurer's deed to the purchaser or the purchaser's heirs or assigns. (Ariz. Rev. Stat. § 42-18152.) Also, Arizona law states that any person who's entitled to redeem may do so at any time before judgment is entered. But if the redeemer has notice of the foreclosure action at the time of redemption, the court will assess the costs the plaintiff (the purchaser) has incurred, including reasonable attorneys' fees. (Ariz. Rev. Stat. § 42-18206.)
If the purchaser doesn't start an action to foreclose your right of redemption within ten years, the lien becomes void, and the purchaser loses the right to foreclose. (Ariz. Rev. Stat. § 42-18208.)
You get a five-year redemption period if the state holds the tax lien. (Ariz. Rev. Stat. § 42-18261.). (Ariz. Rev. Stat. § 42-18261.) After five years expire, the state can apply to the county treasurer to get title to your home.
Your right to redeem ends when the state gets title to the home (at delivery of the deed). (Ariz. Rev. Stat. § 42-18267.)
To redeem the property, you'll have to pay the county treasurer:
Even though Arizona provides a lengthy redemption period after a tax lien sale, in most cases, it is better to take action before you get behind on your taxes to try to make them more affordable.
You might investigate whether you meet the criteria for a property tax abatement. Or you could file an appeal with the county assessor's office to challenge your home's value.
If you're already facing a property tax lien sale in Arizona and have questions or need help redeeming your property, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.
To learn more about property taxes and other aspects of homeownership in general, get Nolo's Essential Guide to Buying Your First Home by Ilona Bray, J.D., Attorney Ann O'Connell, and Marcia Stewart.