In Arizona, if you fall behind in your property taxes, the local government can place a lien on your home. It can then sell that lien and you could eventually lose ownership of your home through a foreclosure. Keep reading to learn about the notices you’ll receive before an Arizona tax lien sale, how the tax lien sale process works, how the subsequent foreclosure process works, and whether you can get your home back after the foreclosure.
If you don’t pay your property taxes in Arizona, the delinquent amount (including the past-due taxes, interest, penalties, and costs) becomes a lien on your home. Once there is a tax lien on your home, the taxing authority may hold a tax lien sale. (If you are struggling to pay your property taxes, learn about your options to avoid a tax sale.)
In Arizona, tax lien sales are held in February each year (Ariz. Rev. Stat. § 42-18112). The winning bidder at the sale doesn’t actually get title to the property. Instead, he or she gets ownership of the tax lien and, along with it, the right to collect the tax debt, plus interest.
The winning bidder at the sale will be the one who offers the lowest rate of interest on the debt (Ariz. Rev. Stat. § 42-18114). (In some other states, the winning bidder at a tax lien sale is the party that offers the highest amount for the lien itself.) If you don’t pay off the amount of the lien plus interest, the purchaser can foreclose the lien and obtain title your home.
If no one bids for the lien at the sale, the county treasurer will assign the lien to the state. The state can eventually apply to the county treasurer to get title to your home if you don’t pay off the debt (Ariz. Rev. Stat. § 42-18113).
In Arizona, you’ll receive one notice about the delinquent taxes and one notice before the tax lien sale takes place. The county treasurer also gives notice of the tax lien sale to the public.
Notice of delinquent taxes. On or before September 1st of each year, the county treasurer must mail you a notice that there are delinquent taxes against your home that are assessed in your name (Ariz. Rev. Stat. § 42-18103).
Notice you’ll receive prior to the tax lien sale. The treasurer will mail you a notice before the tax lien sale (Ariz. Rev. Stat. § 42-18108).
Notice of the sale must also be published and posted. The notice of the tax lien sale will also be:
If someone (an individual or an entity) purchases the lien at the sale, you get a three-year redemption period after the sale date during which you can pay off the tax debt and keep your home (Ariz. Rev. Stat. § 42-18152). This is called “redeeming” the home. (Learn more in Getting Your Home Back After a Property Tax Sale in Arizona.)
Once three years passes, the person or entity that bought the lien at the tax sale can start an action in court to foreclose your right to redeem and obtain title to your home.
Notice before the foreclosure. The foreclosing party must mail you a notice stating his or her intention to file an action to foreclose your right to redeem the home. It must mail the notice at least 30 days, but no more than 180 days, before filing the action (Ariz. Rev. Stat. § 42-18202).
If no one buys the lien at the tax sale and the county treasurer transfers the lien to the state, you get a five-year redemption period (Ariz. Rev. Stat. § 42-18261).
After five years expires, the state can apply to the treasurer to get title to your home.
Notice before the state gets title to your home. The county treasurer will mail you a notice (via certified mail) at least 90 days before it transfers the home’s title out of your name. If the certified mailing is not delivered and the property is in an incorporated city or town, the treasurer must post the notice on your property (Ariz. Rev. Stat. § 42-18266). The treasurer will also publish the notice in a newspaper (Ariz. Rev. Stat. § 42-18265).
The notice will tell you the final date that you can redeem your home (Ariz. Rev. Stat. § 42-18264).
To find Arizona’s tax lien statutes, go to the Arizona Revised Statutes § § 42-18001 through 42-18403.
You can find the Arizona statutes on the Arizona State Legislature’s website at www.azleg.gov/ArizonaRevisedStatutes.asp. (If you need help finding the statutes, see Nolo’s Legal Research FAQs & Basic Info area.)