If you don't pay your property taxes in California, you could lose your home through a tax sale—though this can’t happen until five years after the property is tax defaulted. Find out below what notice you’ll get before a tax sale in California, how the tax sale process works, and whether you can get your home back after the sale.
Property on which taxes remain unpaid at 12:01 a.m. on July 1 becomes tax-defaulted land. If the property is tax-defaulted for at least five years, the county tax collector has the power to sell that property in order to satisfy the defaulted taxes. For example, property taxes that were billed for fiscal year 2014/15 and not paid by June 30, 2015, would be subject to the tax collector's power to sell on July 1, 2020. Most tax-defaulted homes are sold at a public auction. (Cal. Rev. & Tax. Code § 3362). (If you're struggling to pay your property taxes, learn about your options to avoid a tax sale.)
In California, the tax collector must give you a written notice, as well as personally contact you, if possible, before selling your home at a tax sale.
Notice before the sale. The tax collector must send a notice of the proposed sale by certified mail not less than 45 days nor more than 120 days before the sale to your last known mailing address. (Cal. Rev. & Tax. Code § 3701). It must also publish the notice in the newspaper or, if there are no newspapers in the area, post the notice in three public places. (Cal. Rev. & Tax. Code § 3702).
The tax collector must try to personally contact you about the sale. If the home is your primary residence, the tax collector must make a reasonable effort to personally contact you (the owner-occupant) not more than 120 days nor less than ten days before the sale. If the collector is unable to contact you, the collector must try to serve you a written notice not less than five days before the sale. (Cal. Rev. & Tax. Code § 3704.7).
You get five years after you fall behind in taxes to get current on the delinquent amounts. This is called redeeming the home. After five years, if you don’t catch up on the past-due amounts, the tax collector can sell your home. (Cal. Rev. & Tax. Code § 3691).
Your right to pay the debt in installments. You can choose to pay the delinquent amounts in installments at any time up until 5:00 p.m. on the last business day prior to the date when the tax collector gets the right to sell the home. (Cal. Rev. & Tax. Code § 4217). So long as you keep up on the installments, the collector can't proceed with a sale. (Cal. Rev. & Tax. Code § 4218).
If you don’t pay the delinquent amounts, the tax collector will sell the home, generally at a public auction. (Cal. Rev. & Tax. Code § 3693).
At the auction, the winning bid must be at least as much as the amount it would cost for you to redeem the home, plus costs, which includes:
In California, you don’t get the right to redeem the home after the sale. Your right to redeem expires at the close of business on the last business day prior to the sale date. (Cal. Rev. & Tax. Code § 3706, § 3707). If you send in the redemption amount via mail or any other method, the tax collector must receive it by that deadline. (Cal. Rev. & Tax. Code § 3707).
However, if your home doesn’t sell or the purchaser who bought it at the sale backs out of the deal, your right to redeem revives (Cal. Rev. & Tax. Code § 3693.1, § 3707). (Learn more in Getting Your Home Back After a Property Tax Sale in California.)
California law gives counties the ability to sell tax lien certificates (rather than selling tax-defaulted homes), if authorized by resolution of county board of supervisors. (Cal. Rev. & Tax. Code § 4511, § 4521). A tax lien certificate basically gives the purchaser the right to collect the tax debt from you. California counties usually don't sell tax lien certificates.
The citations to California’s tax sale statutes are: Cal. Rev. & Tax. Code §§ 3351 through 3972 and §§ 4101 through 4379. The statutes covering tax lien certificates are: Cal. Rev. & Tax. Code §§ 4501 through 4531.
If you have questions about a tax sale, consider talking to a real estate attorney or a foreclosure attorney.