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

If you don't pay the real property taxes on your Montana home, the county treasurer can hold a tax lien sale and sell that lien—not the property itself—in the form of a "tax lien certificate" to a third party, called an "assignee."

If you don't get caught up on the overdue amounts before the redemption period expires, the assignee can apply for a deed to your home. After the assignee applies for the deed, the property is auctioned to the highest bidder at a tax deed 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, effectively making the property collateral. All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes.

When Are Property Taxes Due in Montana?

In Montana, one-half of the taxes are payable on or before 5:00 p.m. on November 30 of each year or within 30 days after the tax notice is postmarked, whichever is later, and one-half are payable on or before 5:00 p.m. on May 31 of each year. (Mont. Code § 15-16-102).

When Do Property Taxes Become Delinquent in Montana?

All taxes due and not paid on or before 5:00 p.m. on May 31 of each year are delinquent. (Mont. Code § 15-16-102).

Notice You'll Get Before a Tax Lien Attaches to Your Property in Montana

Before a lien can attach to your home, the county treasurer must publish or post a notice of the pending tax lien.

Notice of Pending Tax Lien

The notice must include a statement that the delinquent taxes, including penalties, interest, and costs are a lien upon the property and that unless these amounts are paid before the specified date, a tax lien will attach to the home and may be assigned to a third party. (Mont. Code § 15-17-122).

Publication in a Newspaper or Pubic Posting

The notice must be published in a qualified newspaper. But if the county, or an adjacent county, doesn't have a newspaper, the treasurer must post the notice in three public places in the county. (Mont. Code § 7-1-2121).

The notice must be first published or posted on or before the last Monday in June. (Mont. Code § 15-17-122).

How Tax Lien Certificate Sales Work in Montana

If proper notification was given, the lien attaches to the property no later than the first working day in August. The treasurer then prepares a tax lien certificate. (Mont. Code § 15-17-125).

The county will then sell and assign the certificate to any person who, after providing proof of a mailed notice to the person who owes the taxes, pays to the county the amount of the delinquent taxes, including penalties, interest, and costs, accruing from the date of the delinquency. The notice must have been mailed at least two weeks before the payment date, but not earlier than August 15 and not more than 60 days prior to purchasing the assignment. (Mont. Code § 15-17-323).

Tax Deed Sales in Montana

In Montana, you can save your home from a tax deed sale (see below) by paying the owed taxes, interest, and other charges during the redemption period (described below).

But if you don't pay off the lien by getting current on the delinquent amounts before the redemption period expires, the assignee can apply for a tax deed. Before applying for a tax deed, the assignee has to send a notice that a tax deed will be auctioned unless the property tax lien is redeemed before the auction date. (Mont. Code § 15-18-219).

Then, within 60 days of the application, the property is auctioned off to the highest bidder. (Mont. Code § 15-18-220).

Can I Get My Home Back After a Montana Tax Sale?

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.

How Long Is the Redemption Period After a Montana Tax Lien Sale?

Following the tax lien sale, you can protect your home by redeeming it.

How Long You Get to Redeem After a Montana Tax Lien Sale

In Montana, you must redeem by:

• generally, the first working day in August, three years after the attachment of the tax lien or
• the first working day in August, two years after the attachment of the tax lien if the property is an undeveloped lot upon which special improvement district assessments or rural special improvement district assessments are delinquent. (Mont. Code § 15-18-111).

What Happens If You Don't Redeem After a Montana Tax Lien Sale

Between May 1 and May 30 of the year in which the redemption period expires, the county or assignee has to send a notice that a tax deed may be issued to the county or will be issued to the assignee unless the property tax lien is redeemed before the redemption period's expiration date. (Mont. Code § 15-18-212).

Before issuing a tax deed for a residential property that's owner-occupied and after all other notice requirements have been met, the sheriff, the county treasurer, or a designee of the sheriff or county treasurer must make reasonable attempts to personally deliver a copy of the notice that was previously sent to the owner-occupant. The purpose of the notice is to discuss the consequences of failing to respond. If the personal delivery attempts are unsuccessful, the sheriff, county treasurer, or designee must attempt all reasonable means of informing the owner-occupant of the consequences of failing to respond, including but not limited to a phone call to the owner-occupant or a relative of the owner-occupant. (Mont. Code § 15-18-212).

If you don't redeem by the deadline, the county will issue a tax deed (title) to the purchaser or the county, and you lose all rights to your home (Mont. Code § 15-18-211).

How Much It Costs to Redeem After a Montana Tax Lien Sale

To redeem your home after the tax lien sale, you must pay:

• the past-due amounts, including delinquent taxes, penalties, interest, and costs, and
• the amount of subsequent taxes accrued along with interest and penalty. (Mont. Code § 15-18-112).

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

Typically, it is a good idea to try to reduce your tax liability before you get behind in payments to try to make them more affordable. For example, you could:

• potentially qualify for a property tax abatement, or
• appeal the assessed value of your home (if you think it is incorrect) to lower the amount of taxes you must pay.

Getting Help

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