Your unpaid Louisiana property taxes could lead to a tax sale, which pays off the delinquent tax bill.
Unpaid property taxes in Louisiana will lead to a tax sale. At the auction, your property, or a portion of it, will be sold to pay off the delinquent tax bill.
But the winning bidder from the sale can't get ownership of your home immediately. You'll have time to catch up on the overdue amounts before that happens. However, you'll lose the property permanently if you don't pay off the debt during the "redemption period" after the sale.
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 is a claim against your property to ensure you'll pay the debt; it 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.
What Are the Consequences of Not Being Able to Pay Property Taxes in Louisiana?
Again, if you don't pay property taxes in Louisiana, your property (or a portion of it) will be sold at a tax sale.
How Do Louisiana Tax Sales Work?
In Louisiana, tax sales occur annually, typically in May or June. Under Louisiana law, the sale may consist of a "bid down" process in which the collector sells the least amount of the property that someone will buy for the full amount due with bidding starting at 100% of the property. Bidding may continue down to 1%. (La. Rev. Stat. Ann. § 47:2153).
As an alternative, upon agreement between the tax collector and the local governing authority, a bidder may elect to bid down the redemption penalty rate. (La. Rev. Stat. Ann. § 47:2153). (Basically, the purchaser can elect to bid down the 5% penalty you'll have to pay if you want to get your home back after the sale. This penalty rate is covered in more detail below.)
Tax Sale Certificates in Louisiana
After the sale, the tax collector will file a tax sale certificate in the public records. (La. Rev. Stat. Ann. § 47:2155).
The tax sale certificate transfers "tax sale title" only, which means the buyer gets limited property ownership, subject to the right of redemption (see below). (A tax sale certificate in Louisiana is basically the same as a tax deed, as described in the Louisiana Constitution.)
Notice of a Louisiana Tax Sale
Before the sale, the tax collector must provide notice by mail and publication.
Notice By Mail
No later than the first Monday of February of each year, or as soon thereafter as possible, the collector will mail you (the taxpayer) a notice saying that you must get caught up on the delinquent amounts within 20 days or as soon thereafter before the tax sale is scheduled. Otherwise, the parish or other political subdivision will proceed with a tax sale and sell the property to a new owner. (La. Rev. Stat. Ann. § 47:2153).
However, a tax sale is still valid, even if you don't receive actual notice of the sale, if the collector demonstrates a reasonable and diligent effort to provide notice of the sale. (La. Rev. Stat. Ann. § 47:2153).
After the property goes to tax sale and within 90 days of the expiration of the redemption period, the tax collector must provide written notice by first class mail that the property has been sold at a tax sale and that after the expiration of the redemption period, the property can't be redeemed. (La. Rev. Stat. Ann. § 47:2153).
Notice By Publication
At least 20 days after sending you the written notice, the collector must publish notice about the sale two times within 30 days in an official journal, such as a newspaper. (La. Rev. Stat. Ann. § 47:2153).
How to Stop a Tax Sale From Happening in Louisiana
You can stop the sale by paying the amounts due at any time up until the day before the actual sale. (La. Rev. Stat. Ann. § 47:2153).
At the time of tax sale, you may pay the amounts due plus interest and costs due at the time of the sale, and that payment counts as a redemption. (La. Rev. Stat. Ann. § 47:2163).
Redeeming the Property
Many states allow delinquent taxpayers to pay off the amounts owed and keep the home. This process is called "redeeming" the property.
How the Right to Redeem Usually Works
In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time. Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property.
In other states, though, the redemption period happens before the sale.
Can I Get My Home Back After a Louisiana Tax Sale?
In Louisiana, you generally get three years after the date the tax sale certificate is recorded to redeem your property from the purchaser (La. Const. Art. VII, § 25, HB 256). The redemption period is reduced to 18 months if the property is blighted (which means dilapidated) or abandoned (that is, you have permanently moved out) (La. Const. Art. VII, § 25, HB 256).
To redeem your Louisiana property following the sale, you must pay:
- the price the purchaser paid at the tax sale
- costs
- a 5% redemption penalty (or less if the purchaser bid down the rate at the sale), and
- 1% interest per month until the time you redeem (La. Const. Art. VII, § 25, La. Rev. Stat. Ann. § 47:2153).
After three years, the purchaser can file a lawsuit to quiet the title, which provides the purchaser with clear title and full ownership of the property. (La. Const. Art. VII, § 25).
What Options Do I Have If I Can't Afford to Pay My Property Taxes in Louisiana?
Even though you'll get time to redeem your property after a Louisiana tax sale, it is probably better to take steps to make your taxes affordable before you fall delinquent. For example, you could:
- determine whether you meet the requirements for a property tax abatement, or
- challenge the assessed value of your home if you believe it is incorrect.
Getting Help
If you're already facing a property tax sale in Louisiana and have questions (or need help redeeming your property), consider talking to a foreclosure, tax, or real estate lawyer.
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