Getting Your Home Back After a Property Tax Sale in Colorado

If the county sells a tax lien on your home, you have three years to redeem your home (repay the delinquent amounts) or else you might lose it.

When you don’t pay the real property taxes on your Colorado home, the county treasurer can sell the tax lien that exists on your property, generally to an investor. You then get an opportunity to pay off the overdue amounts plus interest and "redeem" the home within a certain period of time. If you don't redeem within the allotted amount of time, you could lose your home.

Understanding Colorado Tax Lien Sales

In Colorado, after you fall behind in property taxes, the county treasurer can hold a tax lien auction. The lien on your home is then sold to the highest bidder. The winning bidder gets a certificate of purchase and the right to collect the delinquent amounts from you. Eventually, the purchaser of the lien can obtain title to the home if you don’t pay off the past-due amounts, plus interest and costs.

What happens if no one buys the lien at the sale.  If no one bids on the lien at the sale, the county treasurer will strike off the unsold lien to the county (or city, town, or city and county) (Colo. Rev. Stat. § 39-11-108). This means the county gets the certificate of purchase and can eventually obtain title to your home. (For details on the tax lien sale process in Colorado, see  What Happens If I Don't Pay Property Taxes in Colorado.)

How Long You Get to Redeem After a Tax Lien Sale in Colorado

In Colorado, you get a certain amount of time (called a redemption period) to pay off the tax debt after the lien sale -- otherwise you could lose your home. This is called “redeeming” the home.

Redemption Period After the Tax Lien Sale

You get a three-year redemption period following the sale during which you can redeem the property (Colo. Rev. Stat. § 39-11-120). If you haven't redeemed after three years, the holder of the certificate of purchase can apply to the treasurer for title to your home and receive a treasurer’s deed to the property.

When your right to redeem ends.  You can redeem at any time before the treasurer signs the treasurer’s deed giving title to the purchaser (Colo. Rev. Stat. § 39-12-103).

How Much You'll Have to Pay to Redeem

To redeem the property, you’ll have to pay the county treasurer:

  • the amount of the delinquent taxes
  • the amount of the delinquent interest
  • costs (such as newspaper advertising fees)
  • redemption interest from the date of sale, and
  • all taxes accruing on the home after the sale, which the purchaser paid, and that are endorsed on the certificate of purchase, plus redemption interest (Colo. Rev. Stat. § 39-12-103).

You don’t have to pay any excess amount that the winning bidder paid to buy the lien. (In some states you must reimburse the purchaser for the full amount he or she paid for the lien. This is not the case in Colorado.)

Example.  Say you owed $10,000 in delinquent taxes, interest, and costs at the time of the tax lien sale. An investor buys the lien at the sale for $10,500. You don’t have to pay the extra $500 over what you actually owed at the time of the sale in order to redeem. The purchaser forfeits this amount to the county general fund (Colo. Rev. Stat. § 39-11-115). Rather, you’ll have to pay $10,000 plus redemption interest from the sale date, as well as reimburse the purchaser for any subsequent taxes he or she paid on the home plus interest.

Ways to Reduce Your Tax Liability

Even though you get at least three years before you’ll lose your home after a tax lien sale, in most cases, it is better to take action  before  you even become delinquent on your taxes to make them more affordable. For example, you could:

  • find out if you meet the criteria for a property tax abatement, or
  • file an appeal with the county assessor’s office to challenge the value of your home, if you believe the assessed value is incorrect. (Learn more in  Options If You Can’t Pay the Property Tax on Your Home.)

Keep in mind that neither the abatement procedure nor the appeal procedure suspends the deadline for paying your property taxes.

How to Find Colorado’s Tax Lien Sale Laws

To find the statutes that discuss tax lien sales in Colorado, go to Colorado Revised Statutes, Title 39, Articles 11 and 12 of the  Colorado Revised Statutes.

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