Getting Your Home Back After a Property Tax Sale in Michigan

If you’re facing a tax forfeiture and foreclosure in Michigan, you’ll get some time to save your home by redeeming it.

By , Attorney

If you fail to 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. Generally, when taxes remain unpaid, the taxing authority will eventually:

  • sell the lien (and if you don't pay the past-due amount to the lien purchaser, that party can foreclose or use some other method to get title to your home), or
  • sell the property itself in a tax sale.

Though, in some places, a sale isn't held; instead, the taxing authority executes its lien by taking title to the home. State law then generally provides a procedure for the taxing authority to dispose of the property, usually by selling it. In other jurisdictions, the taxing authority uses a foreclosure process before holding a sale.

When you don't pay property taxes in Michigan, you might lose your home to a tax forfeiture and foreclosure process. But "forfeiture" doesn't mean that you've lost your home. Under Michigan tax laws, a "forfeiture" basically means that the county will eventually foreclose your home. After the forfeiture, you'll get some time to get current on the delinquent amounts to save your property from a tax foreclosure.

How Michigan Tax Forfeitures and Foreclosures Work

On March 1 in each tax year, property that's delinquent for taxes, interest, penalties, and fees for the immediately preceding 12 months or more is forfeited to the county treasurer. The taxing authority then files a foreclosure petition with the court no later than June 15. (Mich. Comp. Laws § 211.78h.) The foreclosure starts during the redemption period (see below).

If the taxes go unpaid, the court will enter judgment, generally, no later than late March of the next year, and the home is foreclosed. (Mich. Comp. Laws § 211.78k.) The county treasurer then takes ownership of the property and can sell it to a new owner.

Right to Redeem Your Michigan Home In a Tax Forfeiture

Under Michigan law, you will get a redemption period of approximately one year after the forfeiture to redeem your home. Specifically, you can redeem your home:

  • at any time on or before March 31 after the foreclosure judgment (that is, March 31 in the third year of the delinquency) or
  • if you contested the foreclosure, within 21 days after the court enters a judgment foreclosing the property. (Mich. Comp. Laws § 211.78g.)

You don't get a redemption period after the foreclosure is complete.

How Much It Costs to Redeem Your Michigan Property

To redeem your property, you'll typically have to pay to the county treasurer:

  • the total amount of unpaid delinquent taxes
  • interest
  • penalties, and
  • fees. (Mich. Comp. Laws § 211.78g.)

You Might Be Able to Enter Into an Installment Agreement to Stop a Tax Foreclosure

If your situation meets specific criteria, like if you meet the federal poverty income standards, you might be able to enter into an installment payment plan to get current on the delinquent amounts. (Mich. Comp. Laws § 211.78q). Entering into a payment plan will stop a tax foreclosure. For information about how to apply for a property tax installment plan, check with your county treasurer's office.

Reducing Your Michigan Property Taxes

Even though you'll get some time to redeem your Michigan home after a tax forfeiture, in most cases, it's better to take action earlier to try to make your taxes more affordable. For instance, before you fall behind in your taxes, you could:

  • look into whether you meet the criteria for a property tax abatement, or
  • challenge the taxable value of your home if you think it's incorrect.

Getting Help from a Local Michigan Lawyer

If you want more information about property tax and redemption laws in Michigan, consider talking to a foreclosure lawyer, a real estate lawyer, or a tax 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.

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