What Happens If I Don't Pay Property Taxes in Wyoming?

What happens if you don’t pay your Wyoming property taxes? You might eventually lose your home.

By , Attorney

People who own real property must pay property taxes. The government uses the money 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.

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 have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes.

So, if you don't pay your real property taxes in Wyoming, the county treasurer can hold a tax lien sale. After the tax lien sale, if you don't pay the overdue taxes, plus some other amounts, within about four years, you'll lose ownership of your home.

Is Wyoming a Tax Lien or a Tax Deed State?

Again, if 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. 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.

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.

Wyoming is considered a tax lien state.

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 a Tax Sale Work in Wyoming?

In Wyoming, the county treasurer will hold a public sale to sell the lien. (Wyo. Stat. § 39-13-108.)

If a third party buys the tax lien at the sale. If a third party, such as an investor, buys the lien at the sale, the purchaser gets a certificate of purchase.

If no one purchases the tax lien at the sale. If no one buys the lien at the sale, the county gets the certificate of purchase. (Wyo. Stat. § 39-13-108.)

Notice of the Tax Lien Sale

Before a Wyoming tax lien sale, notice is given by publication or, in some cases, by posting.

Notice by publication. The county treasurer must publish notice of the lien sale in a newspaper once a week for three weeks. (Wyo. Stat. § 39-13-108.)

Notice by posting. If the county doesn't have a newspaper, the treasurer posts a notice near the courthouse door and in three public places at least 30 days before the sale. (Wyo. Stat. § 39-13-108.).

Redemption Period After a Wyoming Property Tax Lien Sale

After the tax lien sale, you get four years, called a "redemption period," during which you can pay off the tax debt, plus various other amounts, before the lien purchaser or county can get ownership of your home. (Wyo. Stat. § 39-13-108.)

You'll also probably get some extra time to pay off the debt and reclaim (redeem) your home after the four-year period expires, depending on whether a third party bought the lien and the method used to get title to your home.

How Long You Get to Redeem if a Third Party Buys the Lien and Applies for a Deed

After four years goes by, but no more than six years, the person or entity that bought the lien at the sale can get title to your home by filing an application for a tax deed from the county treasurer. (Wyo. Stat. § 39-13-108.)

You can redeem up until the application is filed and the county treasurer accepts it. (Wyo. Stat. § 39-13-109.)

How Long You Get to Redeem if a Third Party Buys the Lien and Forecloses

Instead of filing an application for a tax deed, the person or entity that bought the lien at the sale may enforce it by filing a lawsuit in district court. The court action will proceed like a judicial foreclosure. The court will determine the total amount you owe, enter a judgment, and order the home sold to satisfy the debt. (Wyo. Stat. § 39-13-108.)

If the lien purchaser proceeds this way, you can redeem up until the court confirms the sale. (Wyo. Stat. § 39-13-108.)

How Long You Get to Redeem if the County Gets the Certificate of Purchase

If the county got the certificate of purchase at the tax lien sale, the treasurer will issue and record a tax deed to the county four years after the sale. (Wyo. Stat. § 39-13-108.)

You can redeem up until the county issues and records the tax deed.

How Much You'll Have to Pay to Redeem Your Wyoming Home After a Tax Sale

The amount you'll have to pay to redeem depends on whether a third party or the county obtained the certificate of purchase at the sale.

How Much You'll Have to Pay to Redeem Your Wyoming Home From a Third Party

To redeem your home from a third party, you'll have to pay the county treasurer:

  • the purchase price from the sale
  • a 3% penalty
  • 15% interest per year
  • accrued taxes if the purchaser paid them, plus 15% interest per year, and
  • the purchaser's actual expenses, not to exceed $250, if you redeem after the purchaser gives notice of its intent to apply for a tax deed. (Wyo. Stat. § 39-13-109.)

How Much You'll Have to Pay to Redeem Your Wyoming Home From the County

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

  • the certificate amount, which includes overdue taxes, interest, penalties, and costs
  • 15% interest per year, and
  • accrued taxes, plus 15% interest per year. (Wyo. Stat. § 39-13-109.)

Notice Before You Lose Your Wyoming Home

Before you lose your home to a new owner, you'll get a notice from either the lien purchaser or the county.

Notice You'll Get if a Third Party Bought the Lien at a Wyoming Tax Lien Sale

Before applying for a tax deed, the person or entity that bought the lien at the sale must serve you with a written notice by certified or registered mail at least three months before applying for a tax deed. But if you don't occupy the home, the purchaser only needs to publish notice in a newspaper. (Wyo. Stat. § 39-13-108.)

If the purchaser opts to foreclose the lien, you'll learn about the suit when you receive a complaint and summons.

Notice You'll Get if the County Holds the Certificate

If the county holds the certificate of purchase, it must personally serve or mail you a notice by certified mail at least 60 days before issuing a tax deed to itself. (Wyo. Stat. § 39-13-108.)

What Happens to My Mortgage in a Tax Sale?

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly payment to pay the property taxes. The servicer then pays the taxes on your behalf through an escrow account.

But if the property taxes aren't collected and paid through this kind of account, you must pay them directly.

The Servicer Might Pay Any Delinquent Taxes If You Don't

If your loan isn't escrowed and you don't pay the property taxes, the loan servicer might pay any delinquent taxes and then bill you for them. Here's why: Property tax liens almost always have priority over other liens, including mortgage liens and deed of trust liens. (For purposes of this discussion, the terms "mortgage" and "deed of trust" are used interchangeably.)

Because a property tax lien has priority, a completed tax sale process wipes out any mortgages. So, the loan servicer will usually advance money to pay delinquent property taxes to prevent this sale from happening. The servicer will then demand reimbursement from you, the borrower.

If You Don't Reimburse the Servicer, You Might Lose Your Home to a Regular Foreclosure

The terms of most mortgage contracts require the borrower to stay current on the property taxes. If you don't reimburse the servicer for the tax amount that it paid, you'll be in default under the mortgage's terms.

The servicer can then foreclose on the home in the same manner as if you had fallen behind in monthly payments.

Your Servicer Might Set Up an Escrow Account

After demanding repayment of the amount it paid for the taxes, penalties, and interest (assuming you repay this debt), your servicer will probably set up an escrow account for the loan.

Each month, you'll have to pay approximately one-twelfth of the estimated annual cost of property taxes—and perhaps other expenses, like insurance—along with your regular monthly payment of principal and interest. This money goes into the escrow account.

The loan servicer then pays the cost of the taxes and other escrow items on your behalf through the escrow account.

What Gives the Servicer the Right to Set Up an Escrow Account?

Many mortgages have a clause that allows the lender to establish an escrow account basically at any time it chooses. The servicer establishes and manages the account on the lender's behalf.

To find out if and when the lender can set up an escrow account for your loan, read your mortgage contract and any other relevant documentation you've signed, like an escrow waiver.

Pros and Cons of Having an Escrow Account

The downside to having an escrow account is that you'll have to make a bigger monthly payment to the servicer. On the positive side, having an escrow account saves you from having to come up with a large amount of money when tax bills, and possibly other bills, are due.

Getting Help

If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay.

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

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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