If you don't pay your Maryland property taxes, the tax collector can sell your home at a tax sale to pay off the delinquent amounts. But you won't face a tax sale without fair warning, and you'll get the chance to get your home back after the sale by "redeeming" it.
To redeem your home after a tax sale, you must pay off the past-due amounts, plus various other expenses, within a limited time.
When you don't pay your property taxes, the past-due amount becomes a lien on your home. This type of lien almost always has priority over other liens, including mortgages.
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.
In Maryland, the winning bidder at the tax sale gets a certificate of sale (basically, a tax lien certificate). (Md. Code Ann., Tax-Prop. § 14-820.) If you don't pay off the delinquent taxes during the redemption period, the purchaser will foreclose your right of redemption (see below) and get title to your home.
And sometimes, a tax foreclosure process is used, or the taxing authority simply executes its lien by taking title to the home.
After your Maryland taxes become overdue, the collector is permitted to sell your home at a tax sale to pay off the delinquent amounts. (Md. Code Ann., Tax-Prop. § 14-808.)
At the tax sale, which is a public auction, your property will be sold to the highest bidder willing to pay at least the total amount of all taxes due, together with interest, penalties, and expenses related to the sale. (Md. Code Ann., Tax-Prop. § 14-817.)
After the sale, the winning bidder gets a certificate of sale. (Md. Code Ann., Tax-Prop. § 14-820.) The winning bidder can't get ownership of your home yet because Maryland law establishes a waiting period, called a "redemption period," during which you can pay off the debt. The certificate of sale acts as evidence of the winning bidder's interest in the property during the redemption period.
Within 60 days after the tax sale, the collector must send you a notice by mail that includes information about the sale and your right to redeem the home following the sale. (Md. Code Ann., Tax-Prop. § 14-817.1.) If you don't pay off the debt during the redemption period, the purchaser will foreclose your right of redemption and get title to your home.
The purchaser must generally wait six months before foreclosing your right of redemption. (Md. Code Ann., Tax-Prop. § 14-833.)
So, Maryland homeowners generally get at least six months after the sale to redeem the home. These six months are called a "redemption period."
But in Baltimore City, the redemption period is nine months from the date of sale for owner-occupied residential properties. (Md. Code Ann. Tax-Property § 14-833.) During this time, you can pay off the tax debt and prevent the purchaser from getting the title to your property.
In some cases, the winning bidder can start the foreclosure process sooner.
For instance, a person or entity that purchases a certain type of abandoned property or vacant property, or when the governing body of a county or municipal corporation becomes the holder of a certificate of sale, the foreclosure can start at any time after the sale date. (Md. Code Ann., Tax-Prop. § 14-833.)
If the home needs substantial repairs or will need substantial repairs within six months, to comply with the local building code, the purchaser might, depending on the circumstances, be able to start the foreclosure at any time after 60 days from the sale date. (Md. Code Ann., Tax-Prop. § 14-833.)
Again, in most cases, after six months expires, the winning bidder can foreclose your right of redemption in court to get title to your home. (Md. Code Ann., Tax-Prop. § 14-833.)
Usually, the winning bidder must give you two notices before it starts the foreclosure. The winning bidder can't begin the foreclosure until at least two months after sending you the first notice and at least 30 days after sending the second notice. (Md. Code Ann., Tax-Prop. § 14-833.)
To start the foreclosure, the winning bidder must file a lawsuit in court. (Md. Code Ann., Tax-Prop. § 14-833.) After the tax lien certificate holder files a complaint, the court issues summonses to all named defendants. The court will also order the publication of the foreclosure proceeding, and the case will go through the litigation process.
The foreclosing purchaser gets a deed to the home after a court enters a decree foreclosing your right of redemption. (Md. Code Ann., Tax-Prop. § 14-847.)
To redeem your home after a tax sale, you must pay the County or Baltimore City the redemption amount. This payment has to be in certified funds, like a cashier's check or a bank money order.
Again, you must pay the redemption amount to redeem the property after a tax sale. The redemption amount is generally:
The amount will vary depending on how long you wait to redeem. The longer you hold off on redeeming, the more you'll have to pay.
You can redeem until your right of redemption has been finally foreclosed. (Md. Code Ann., Tax-Prop. § 14-827, § 14-833.)
If the winning bidder doesn't start the foreclosure within two years after the date of the certificate of sale, the certificate becomes void, and the bidder loses all rights to your property. (Md. Code Ann., Tax-Prop. § 14-833.)
At this point, your property will probably be sold at another tax sale if you don't get caught up on the overdue amounts.
If you want more information about property tax and redemption laws in Maryland, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer with experience with property tax issues.
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.