What Happens If I Don't Pay Property Taxes in the District of Columbia?

What happens if you don’t pay your Washington, D.C. property taxes? You might eventually lose your home.

By , Attorney

If you don't pay your real property taxes in the District of Columbia, the mayor can sell your home at a tax sale. But you can stop the sale by getting current on the debt.

You'll also have some time after the sale to pay off the tax debt, plus costs and expenses, and redeem the property.

How Do Property Taxes Work?

People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt.

All states and the District of Columbia have laws that allow the local government to sell a home through a tax sale process (or get title to the property in another way) to collect delinquent taxes.

Does D.C. Sell Tax Liens or Tax Deeds?

Again, when 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.

Tax Deed States

In some places, the taxing authority sells the home if the homeowner doesn't pay off the debt. However, 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 D.C., the mayor sells the home, and the buyer gets a certificate of sale, subject to the homeowner's right of redemption (see below). (D.C. Code § 47-1348.)

Tax Lien States

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.

Other Tax Sale Procedures

And sometimes, a tax foreclosure process is used, or the taxing authority simply executes its lien by taking title to the home.

How Does the District of Columbia Handle Property Tax Non-Payment?

If you get behind in paying your real property taxes in D.C., the past-due amount automatically becomes a lien on your home as of the date the tax was due and unpaid. (D.C. Code § 47–1331.)

The mayor may then appoint an agency to conduct a tax sale, which will be a public auction, to sell the property. (D.C. Code § 47-1332, § 47-1346.)

Can Someone Take Your Property By Paying the District of Columbia Property Taxes?

At the auction, the buyer has to pay at least the amount of the past-due taxes. (D.C. Code § 47-1346.) However, as of 2021, the tax sale threshold is generally $2,500, meaning your home can't be sold for less than $2,500 in delinquent taxes. (D.C. Mun. Regs. Tit. 9, § 317.)

If no one bids enough to cover the amount of the overdue taxes, the real property is bid off to the mayor, who purchases it in the name of the District of Columbia. (D.C. Code § 47-1352.)

Notice of a D.C. Tax Sale

Before the sale, you'll get one notice of delinquency in the mail, letting you know that the mayor will sell the home if you don't get caught up on the overdue amounts. (D.C. Code § 47-1341.)

You'll get the notice at least 30 days before a notice of sale is published. The notice of sale must be published in two newspapers at least once. The notice, which includes the list of properties that will be sold, must also be posted on the Office of Tax and Revenue's website. (D.C. Code § 47-1342.)

How to Stop a Tax Sale in the District of Columbia

You can stop the sale from happening by paying the total amount stated in the notice of delinquency. (D.C. Code § 47-1341.)

What Happens After a Tax Sale in Washington, D.C.

After the auction, the high bidder (the purchaser) gets a certificate of sale. (D.C. Code § 47-1348.)

The certificate doesn't transfer the home's legal title or give the purchaser the right to enter the home. To get legal title to the home, the purchaser must foreclose your right of redemption (see below). (D.C. Code § 47-1348.)

Once your redemption right is foreclosed, the purchaser gets a deed to the home and becomes the property's new owner. (D.C. Code § 47-1382, § 47-1370.)

Can I Get My Home Back After a Tax Sale in Washington, D.C.?

Following the sale, the purchaser must wait six months before it takes steps to foreclose your right to redeem. (D.C. Code § 47-1370.) So, in D.C., you get at least six months, called a "redemption period," to pay off the tax debt after the sale (known as "redeeming" the home).

After foreclosing your right of redemption, the purchaser will own your home.

What Is the Deadline to Redeem After a Tax Sale in the District of Columbia?

You can redeem at any time up until the foreclosure is final. (D.C. Code §§ 47-1360, 47-1370.) If you haven't redeemed by the end of the foreclosure, the purchaser gets a deed (title) to your home. (D.C. Code § 47-1382.)

How Much You'll Have to Pay to Redeem Your Home After a D.C. Tax Sale

To redeem your home, you'll have to pay:

  • the purchase price from the auction, but not the surplus (that is, you must pay the past-due taxes, interest, costs, and penalties you owed at the time of sale)
  • interest
  • taxes, interest, and penalties that the purchaser paid on the home, along with the interest that would be owed if the purchaser had not paid the taxes
  • taxes to bring the real property current
  • delinquent special assessments owed
  • certain other expenses the purchaser paid, and
  • the value of reasonable improvements the purchaser made to the property, if a judgment of foreclosure of the right of redemption is set aside (for example, because of a flaw in the foreclosure process). (D.C. Code § 47-1361.)

Example. Say you owed $7,000 in delinquent taxes, interest, costs, and penalties at the time of the auction. A private party buys the home at the sale for $7,500. You don't have to pay the extra $500 over what you owed at the time of the sale to redeem. But you'll have to pay any additional amounts required by law as listed above, like taxes the purchaser paid or any outstanding taxes that are now due.

What Options Do I Have If I Can't Afford to Pay My Property Taxes in Washington, D.C.?

Even though you get at least six months to redeem your home after a D.C. tax sale, in most cases, it is better to take action before you even become delinquent on your taxes. For example, you could:

  • find out if you meet the criteria for a property tax abatement or
  • file an appeal to challenge the value of your home if you believe the assessed value is incorrect.

What Happens to My Mortgage in a Tax Sale?

Because a property tax lien has priority, mortgages (and deeds of trust) get wiped out if you lose your home through a tax sale process. So, If your loan isn't escrowed and you fail to pay the property taxes like you're supposed to, the loan servicer will usually advance money to pay delinquent property taxes to prevent a tax sale from happening.

Most mortgages have a clause allowing the lender to add the amount it paid to bring the taxes current to your loan balance. You'll then have to make repayment arrangements with the servicer or potentially face a foreclosure.

Getting Help

Talk to a foreclosure lawyer, tax lawyer, or real estate lawyer if you're facing a tax sale in the District of Columbia and have questions about the process or need help redeeming your property.

To learn more about property taxes and other aspects of homeownership, 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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