How to Get Your Home Back After a Tax Sale: Redeem It or Pursue Legal Options

Generally, people who lose their home to a tax sale have two options for getting the property back: Redeeming the home or getting a court to set the sale aside.

• Redeeming the property. In most states, delinquent taxpayers get some time during which they can redeem (reclaim) the home after a tax sale by paying the delinquent amounts or reimbursing the purchaser from the sale.
• Setting aside (overturning) the sale. In some situations, you might be able to invalidate a completed tax sale.

So, if you've defaulted on your property taxes and lost your home in a tax sale, you might be able to get it back, depending on state law and the circumstances.

How Do Property Tax Sales Work?

If you don't pay your property taxes or other municipal charges, like a sewer or water bill, the past-due amount becomes a lien on your home. This type of lien almost always has priority over other liens, including mortgages.

When taxes remain unpaid, in most cases, the taxing authority will eventually sell the lien (and if you don't pay the past-due amount to the purchaser of the lien, that party can foreclose or go through some other process to get title to your home) or sell the property itself in a tax deed auction. However, 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 or getting ownership of the property.

What Is a "Redemption Period" in a Tax Sale?

In most states, delinquent taxpayers get a set amount of time, called a "redemption period" after a tax sale to reclaim the home by paying the buyer the amount paid at the sale or paying the taxes owed, plus interest, penalties, and costs. But in some states, the redemption period occurs before the sale.

You should redeem as soon as possible to prevent additional interest and penalties from accruing. If you don't redeem, the purchaser can get title to the home free and clear of any liens that were on the property before the sale.

Can I Get My Home Back After It's Sold for Taxes?

Exactly how long the redemption period lasts varies from state to state, but one to three years is typical. In some states, the time frame is much shorter. And in some states, the redemption period happens before the sale.

The cost to redeem varies considerably from state to state. You might have to pay the total amount of the delinquent taxes, a penalty, interest, and costs. Or you might need to include all delinquent taxes, special assessments, interest, penalties, costs, and applicable fees, plus any subsequent taxes, special assessments, accrued interest on those taxes and special assessments, and costs that the purchaser paid. Or you might have to pay the amount the purchaser bid for the property, a fee, any amounts the purchaser paid for taxes, plus penalties, interest, and costs on the property, and possibly a redemption premium. Again, what you'll have to pay to redeem varies depending on state law.

How Long Do I Have to Redeem My Property?

Click on your state's name below to find details on property tax sales and redemption period laws where you live.

Can I Live In My Home During the Redemption Period?

Usually, the homeowner gets the right to live in the home during the redemption period.

Setting Aside a Completed Tax Sale

Sometimes, homeowners aren't aware that a tax sale has been scheduled until after it's already happened. Below are some situations where you might be able to invalidate a completed tax sale.

Defects In the Tax Lien or Tax Sale Process

Defects in the tax lien itself or the sale process might provide grounds to set aside a tax sale.

Common Legal Defects In the Tax Lien or Tax Sale Process

Common legal defects in the tax lien or tax sale process can affect the validity of the sale. For example, omitting one of the property owners' names from the lien or failing to follow statutory procedures could be enough to invalidate a tax sale.

Can a Court Void a Tax Sale If Proper Notice Wasn't Given?

Failing to give proper notice could convince a court to overturn the sale. If notice wasn't sent to the correct or last-known address or if a notice wasn't sent to the taxpayer at all, this could be grounds to challenge the sale.

Other Mistakes in the Tax Lien or Tax Sale Process

Minor mistakes probably aren't enough to invalidate a sale, but a defect that prejudices the homeowner's rights probably will.

Whether a particular defect is significant enough to invalidate the sale depends on a state's statutes and case law.

The Taxes Were Paid or Aren't Owed

If the homeowner already paid the taxes, the sale is invalid and could be set aside. Likewise, if the property is exempt from taxation, a tax sale would be void.

Excusable Neglect

A legitimate excuse for failing to respond to, say, a tax sale foreclosure action might justify setting aside the sale. For instance, if a 74-year-old widow with a psychiatric disorder fails to do anything about the delinquent taxes until eviction proceedings start, a court would likely set aside the sale and let her keep the home if she pays the full amount of the taxes due.

Do I Need a Lawyer to Challenge a Tax Sale?

The reasons that justify, as well as the procedures for, invalidating a tax sale are complicated. This article covers just a few situations that might provide grounds to set aside a tax sale. If you've lost your home to a tax sale and want to learn more about setting the sale aside or redeeming the property, you should speak with a qualified real estate attorney, tax lawyer, or foreclosure lawyer as soon as possible.