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

If your property taxes are delinquent in Mississippi, the county treasurer can hold a tax sale, and you might eventually lose your home. Generally, people who lose their home to a tax sale in Mississippi have two options for getting the property back: Redeeming it or setting aside (overturning) the sale.

So, you usually get the opportunity to pay off the overdue amounts, plus interest, and "redeem" the property within a specified amount of time. But if you don't pay up, you'll lose your chance to keep your Mississippi home unless you can invalidate the completed tax sale, which doesn't happen very often.

How 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 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.

What Are the Consequences of Not Being Able to Pay Taxes in Mississippi?

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property 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. In Mississippi, the county treasurer can hold a tax sale to collect overdue property taxes.

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 § 27-41-59, § 27-41-75).

Tax Sale Auctions in Mississippi

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 § 27-41-59).

Tax Certificates

Following the auction, the purchaser gets a receipt, called a "tax certificate," to evidence the claim against the property. (Miss. Code § 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 § 27-45-23).

Notice Before a Tax Sale in Mississippi

The tax collector must give notice to the taxpayer five days before the sale. (Miss. Code § 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 § 27-41-55).

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.

How Long Is the Redemption Period After a Mississippi Tax Sale?

Under Mississippi law, most people get a two-year redemption period after the sale. During this time, you can pay off the tax debt and prevent the purchaser from getting title to your home. (Miss. Code § 27-45-3, § 21-33-61).

Minors and persons of unsound mind who lose their home to the tax sale get the right to redeem for two years after attaining full age or being restored to sanity. (Miss. Code § 27-45-3, § 21-33-61).

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

How Much You'll Have to Pay to Redeem Your Mississippi Home

To redeem your home after the sale, you have to pay the following redemption amount to the chancery clerk, regardless of the amount of the purchaser's bid at the tax sale:

• the amount of taxes due plus 5%
• sale costs
• interest on the taxes and costs at the rate of 1.5% per month (or any fraction thereof) from the sale date, and
• all costs that have accrued on the property since the sale, plus interest from the date the costs accrued at the rate of 1.5% per month or any fraction thereof. (Miss. Code § 27-45-3).

Minors and persons of unsound mind who attain full age or are restored to sanity and want to redeem must also pay the value of any permanent improvements that the purchaser made to the property after the expiration of two years from the sale date. (Miss. Code § 27-45-3, § 21-33-61).

Setting Aside a Completed Tax Sale

In some rare situations—like if the tax lien or tax sale process has defects, the taxes were paid or not owed, or excusable neglect—you might be able to invalidate a completed tax sale. The reasons that justify, as well as the procedures for, invalidating a tax sale are complicated.

If you lose your home to a tax sale and want to learn more about setting the sale aside, talk with a qualified lawyer as soon as possible.

What Happens to My Mortgage in a Tax Sale?

Because a property tax lien has priority, mortgages (and deeds of trust) get wiped out if you lose your home through a tax sale process. So, If your loan isn't escrowed and you fail to pay the property taxes like you're supposed to, the loan servicer will usually advance money to pay delinquent property taxes to prevent a tax sale from happening.

Most mortgages have a clause allowing the lender to add the amount it paid to bring the taxes current to your loan balance. You'll then have to make repayment arrangements with the servicer or potentially face a foreclosure.

What Options Do I Have If I Can't Afford to Pay My Property Taxes in Mississippi?

Even though you'll get a redemption period after a Mississippi tax sale, in most cases, it's better to take action before you become delinquent on your taxes to make them more affordable. You could, for example:

• find out if you meet the criteria for a property tax abatement, or
• request a change in the property's assessment if you feel your assessed property value doesn't reflect the fair market value.

Getting Help

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