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

If your property taxes in Michigan are delinquent, you might lose your home to a tax forfeiture and foreclosure process. In this context, a "forfeiture" doesn't mean that you've lost your home. In Michigan, "forfeiture" means the county will eventually foreclose your home.

You'll get some time after the forfeiture to get current on the delinquent amounts to save your home from a tax foreclosure.

What Is a Tax Lien and How Does It Affect Me in Michigan?

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.

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

What Are the Legal Consequences of Not Paying Property Taxes in Michigan?

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 sent to the county treasurer for collection. (For descriptive purposes, we'll say this happens in "Tax Year + 1.") (Mich. Comp. Laws § 211.78g (2025).) Delinquent property forfeits to the county treasurer on March 1 of the next year (Tax Year +2).

But if a property is forfeited to a county treasurer, the government doesn't get a right to possession of the property until the April 1 immediately following the entry of a foreclosure judgment or, in a contested case, until 22 days after the foreclosure judgment (see below). (Generally, this happens in Tax Year +3.) (Mich. Comp. Laws § 211.78g (2025).)

You'll get about a year after the forfeiture to pay off the debt before losing the home in a tax foreclosure. This period is called a "redemption period," explained in more detail below.

Can My Property Be Foreclosed for Unpaid Taxes in Michigan?

The foreclosure starts during the redemption period. The foreclosing party files a petition with the court no later than June 15th (Tax Year +2). (Mich. Comp. Laws § 211.78h (2025).)

If the taxes go unpaid, the court will enter judgment, generally, no later than late March of the next year (Tax Year +3), and the home is foreclosed. (Mich. Comp. Laws § 211.78k (2025).) Essentially, taxes that remain unpaid as of March 31 in the third year of the delinquency are foreclosed. The county treasurer then takes ownership of the property and can sell it to a new owner.

Notices You'll Receive in a Michigan Tax Forfeiture and Foreclosure

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

Notice of Delinquent Taxes During the Collection Period

By June 1 and September 1 in the first year after the unpaid taxes (Tax Year +1), 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 (2025).)

By February 1 in the second year (Tax Year +2), 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 (2025).)

Notice During the Foreclosure Action

The foreclosing governmental unit must mail a notice not less than 30 days before a "show cause" hearing (in Tax Year +2). (Mich. Comp. Laws § 211.78i (2025).) (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 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, and, in addition, a notice must be posted with the information that otherwise would have been verbally provided had personal service been accomplished. (Mich. Comp. Laws § 211.78i (2025).)

Can I Redeem My Home After a Tax Forfeiture in Michigan?

You get a redemption period of about one year, during which you can pay off the delinquent amounts and redeem the home following the forfeiture (not the foreclosure).

Deadline to Redeem Your Michigan Property

Unless all unpaid delinquent taxes, interest, penalties, and fees are paid on or before the March 31 immediately succeeding the entry of a judgment foreclosing the property or, in a contested case, within 21 days of the entry of a judgment foreclosing the property, the title to the property goes to the foreclosing governmental entity. So, March 31st in Tax Year +3 is generally the last day you get to redeem the home. (Mich. Comp. Laws § 211.78g (2025).)

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 (2025).)

The property is sold after the court enters a foreclosure judgment and after the right of redemption has expired.

How Much It Costs to Redeem Your Michigan Home

To redeem your property, you'll typically have to pay to the county treasurer:

• the total amount of unpaid delinquent taxes
• interest
• penalties, and
• fees. (Mich. Comp. Laws § 211.78g (2025).)

Can I Set Up a Payment Plan for My Tax Debt in Michigan?

Under certain circumstances, such as if you meet the federal poverty income standards, you might be able to enter into an installment payment plan to get caught up on the amount of taxes you owe. (Mich. Comp. Laws § 211.78q (2025).)

If you enter into a payment plan, the tax foreclosure will stop. Contact your county treasurer's office to learn how to apply for a property tax installment plan.

What Happens to Profits From a Michigan Tax Foreclosure and Sale?

Previously, under Michigan law, after officials foreclosed and then sold the property of a delinquent taxpayer, they could keep all proceeds above what was needed to pay off the tax debt. Most states refund the surplus, but Michigan was among a few states that allowed the government to keep the profits, even if the leftover cash far exceeded the amount owed.

Michigan law (and federal law) now prohibits counties from keeping any profit from the sale of homes that were foreclosed on for failing to pay taxes.

Michigan Supreme Court Decision: Rafaeli, LLC v. Oakland County

In 2014, Oakland County foreclosed on a home that Uri Rafaeli's business (Rafaeli, LLC) owned over an $8.41 tax debt. The county later sold the property for $24,500 and kept the profits. In a similar situation, Andre Ohanessian lost his property to the county, which sold it for $82,000. The county kept all of the proceeds over the $6,000 tax debt. Rafaeli and Ohanessian filed a suit challenging the legality of Michigan's law allowing the county to retain the profits after a tax foreclosure.

In 2020, the Michigan Supreme Court heard the case of Rafaeli, LLC v. Oakland County. It determined that homeowners who fail to pay property taxes shouldn't lose all their equity after their home is forfeited, foreclosed, and sold off. Instead, the homeowner gets the excess proceeds. The Michigan tax code was modified in December 2020 to align with the Rafeli ruling. (Mich. Comp. Laws § 211.78t (2025).) Under this statute, you must file a notice with the county by July 1 immediately following the effective date of the foreclosure to claim an interest in proceeds.

In 2024, the Michigan Supreme Court ruled in Schafer, et al. v. Kent County that its 2020 Rafaeli decision, which determined that former property owners are entitled to the windfall from tax foreclosure sales, applies retroactively to tax foreclosures that happened before 2020. This decision means that if your home was foreclosed on by the government before 2020 because of unpaid property taxes, you're entitled to any surplus funds.

How to Claim the Proceeds After a Michigan Tax Sale

You may file a claim for the excess proceeds (if any) if you had an interest in a property when the tax foreclosure happened. For foreclosed property transferred or sold after July 17, 2020, by the July 1 immediately following the effective date of the foreclosure of the property, you must notify the foreclosing governmental unit using a specific form, Form 5743, Notice of Intention to Claim Interest in Foreclosure Sales Proceeds. (Mich. Comp. Laws § 211.78t (2025).)

The process for claiming surplus funds before 2020 is complicated (see Mich. Comp. Laws § 211.78t(1)(b),(6) (2025)) and some counties are establishing a claims process. If you need help claiming the excess proceeds following a tax foreclosure, talk to a local foreclosure lawyer, a real estate lawyer, or a tax lawyer.

What Are the Payment Plans and Tax Relief Options in Michigan?

Even though you'll get some time to redeem your Michigan home after a tax forfeiture, in most cases, it's better to take action earlier to try to make your taxes more affordable. For instance, before you fall behind in your taxes, you could:

• look into whether you meet the criteria for a property tax exemption or
• challenge the taxable value of your home if you think it's incorrect.

Learn More About Property Taxes in Michigan

To get more information about tax forfeitures and foreclosures in Michigan, go to the state's Property Tax Forfeiture and Foreclosure website. The Michigan Department of Treasury's website also has useful information.

If you're already facing a property tax forfeiture and foreclosure in Michigan and have questions (or need help redeeming your property), consider talking to a foreclosure, tax, or real estate lawyer.