What Happens If I Don't Pay Property Taxes in Mississippi

If you’re delinquent on your Mississippi property taxes, you could eventually lose your home after a tax lien sale.

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 your behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, you must pay them directly.

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 have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. Accordingly, if you don't pay the real property taxes on your Mississippi home, the county treasurer can hold a tax sale and you might eventually lose ownership of the property.

But the winning bidder from the sale can't get ownership of your home right away; you'll get some time to get caught up on the overdue amounts before this happens. You'll most likely eventually lose the property permanently, though, if you don't pay off the debt during what's called a "redemption period" after the sale.

How Mississippi Tax Sales Work

In Mississippi, if you don't pay your real estate taxes on time, the property will be sold at a county tax auction to the bidder who will pay the taxes and costs due for the smallest interest in the property. (Miss. Code Ann. § 27-41-59, § 27-41-75). Auctions are held on the first Monday of April or the last Monday of August. The successful bidder at the sale pays off the past-due amounts and gets a lien on the property. If no one bids at the auction, the debt is "struck off" (sold) to the state, which gets the lien. (Miss. Code Ann. § 27-41-59).

Following the auction, the purchaser gets a receipt, called a "tax certificate," to evidence the claim against the property. (Miss. Code Ann. § 27-41-75). At the end of the redemption period (see below), if you haven't paid off your debt, the purchaser can get a tax deed (title) to your home. (Miss. Code Ann. § 27-45-23).

Notice Before the Tax Sale in Mississippi

The tax collector must give notice to the taxpayer five days before the sale. (Miss. Code Ann. § 27-41-49). The tax collector generally must also publish a notice of sale in a newspaper for two weeks. In some districts, the notice must be posted on the courthouse door. (Miss. Code Ann. § 27-41-55).

Redeeming the Property

Many states give delinquent taxpayers the chance 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.

Redemption Period in Mississippi

In Mississippi, most homeowners get two years after the sale to redeem the home. (Miss. Code Ann. § 27-45-3, § 21-33-61). The court clerk and municipal clerk must, not more than 180 days and not less than 60 days before the redemption period expires, issue notice to the property owner as of 180 days before the expiration that title to property shall become absolute in purchaser unless the property is redeemed by the expiration date. (Miss. Code Ann. § 27-43-1, § 27-43-4).

After the redemption period expires, the court clerk will, on demand, execute a deed to the purchaser. (Miss. Code Ann. § 27-45-23).

Does a Mortgage Survive a Tax Sale in Mississippi?

Property tax liens almost always have priority over other liens, including mortgage liens and deed of trust liens. (For purposes of this discussion, the terms "mortgage" and "deed of trust" are used interchangeably.) Because a property tax lien has priority, if you lose your property through a tax sale process, the process wipes out any mortgages. So, the loan servicer will usually advance money to pay delinquent property taxes. The servicer will then demand reimbursement from you (the borrower).

The terms of most mortgage contracts require the borrower to stay current on the property taxes. If you don't reimburse the servicer for the tax amount it paid, you'll be in default under the terms of the mortgage, and the servicer can foreclose on the home in the same manner as if you had fallen behind in monthly payments.

Your Servicer Might Set Up an Escrow Account

After demanding repayment of the amount it paid for the taxes, penalties, plus interest (and assuming you repay this tax debt), your servicer will probably set up an escrow account for the loan. Each month, you'll have to pay approximately one-twelfth of the estimated annual cost of property taxes—and perhaps other expenses, like insurance—along with your usual monthly payment of principal and interest. This money goes into the escrow account. The loan servicer then pays the cost of the taxes and other escrow items on your behalf through the escrow account.

The downside to having an escrow account is that you'll have to make a bigger payment to the servicer each month. On the positive side, having an escrow account saves you from having to come up with a large amount of money when tax bills, and perhaps other bills, are due.

Getting Help

If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay. If you're already facing a property tax sale in Mississippi and have questions or need help redeeming your property, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.

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