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

If you're a Michigan homeowner, you'll likely forfeit your property to the county treasurer if you don't pay your property taxes. The county or other governmental entity can then foreclose, and you'll lose your home. Fortunately, you'll get some time after the forfeiture to get current on the delinquent amounts to save your home from the tax foreclosure.

In this article, you'll find details on property tax laws in Michigan, with citations to statutes so you can learn more. Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting an attorney if you're facing a tax forfeiture or foreclosure.

What Is a Property Tax Lien?

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

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. In Michigan, on March 1, unpaid taxes levied in the immediately preceding year are, in most cases, returned to the county treasurer as delinquent for collection. (Mich. Comp. Laws § 211.78a). The county will then try to collect the taxes during that year.

How Property Tax Forfeitures and Tax Foreclosures Work in Michigan

If you don't pay your delinquent real property taxes in Michigan, your property will be forfeited to the county and then foreclosed.

How a Tax Forfeiture Works

On March 1 in each tax year, property that's delinquent for taxes, interest, penalties, and fees for the immediately preceding 12 months or more is forfeited to the county treasurer. (Mich. Comp. Laws § 211.78g). But a forfeiture doesn't mean that you've lost your home. In this context, "forfeiture" means that the county will eventually foreclose your home.

You'll get about a year after the forfeiture to pay off the debt before you lose the home in a tax foreclosure. (Mich. Comp. Laws § 211.78g). This year-long period is called a "redemption period," which is explained in more detail below.

How a Tax Foreclosure Works

The foreclosure starts during the redemption period. The foreclosing party files a petition with the court no later than June 15th. (Mich. Comp. Laws § 211.78h). If the taxes go unpaid, the court will enter judgment, generally, no later than late March of the next year and the home is foreclosed. (Mich. Comp. Laws § 211.78k). The county treasurer then takes ownership of the property and can sell it to a new owner.

Under Michigan law, after officials foreclose and then sell the property of delinquent taxpayers, they may keep all proceeds above what's needed to pay off the tax debt. Most states refund the surplus, but Michigan is among a few states that allow the government to keep the profits.

Notices You'll Receive

You'll receive various notices before the forfeiture and before you lose your home to the foreclosure, including the following.

Notice of Delinquent Taxes During the Collection Period

Before the forfeiture, the county treasurer has to send a first and second notice via first-class mail about the delinquent taxes. (Mich. Comp. Laws § 211.78b, § 211.78c). The county treasurer must mail you another notice, this time by certified mail. Among other things, the notice will tell you when the property will be forfeited to the county treasurer if you don't get current on the unpaid delinquent taxes, interest, penalties, and fees. (Mich. Comp. Laws § 211.78f).

Notice During the Foreclosure Action

The foreclosing governmental unit must mail a notice not less than 30 days before a "show cause" hearing. (Mich. Comp. Laws § 211.78i). (A "show cause" hearing is part of the foreclosure process where the foreclosing party must demonstrate why it should get title to your home).

Personal or Posted Notice

If you occupy the property, the foreclosing party must try to serve you notice personally and orally tell you that, among other things, the property will be foreclosed unless the delinquent amounts are paid. If personal service isn't made, notice about the foreclosure must be posted on the property. (Mich. Comp. Laws § 211.78i).

Redemption Period After Forfeiture

You get about one year to pay off the delinquent amounts to "redeem" the home following the forfeiture (not the foreclosure).

Deadline to Redeem

March 31st in the third year of the delinquency is generally the last day you get to redeem the home. (Mich. Comp. Laws § 211.78g). But if you contest the foreclosure by filing a written objection with the court, your deadline to redeem is within 21 days after the court enters the foreclosure judgment. (Mich. Comp. Laws § 211.78k).

How Much It Costs to Redeem the Home

To redeem, you must pay the delinquent taxes plus some additional amounts. (Learn more in Getting Your Home Back After a Property Tax Sale in Michigan.)

Getting Help From a Tax or Foreclosure Attorney

If you're facing a property tax forfeiture and foreclosure in Michigan and you need help redeeming the property, consider talking to a foreclosure lawyer, a real estate lawyer, or a tax lawyer to learn about your different options and rights.