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

In Oklahoma, if your property tax payment is three or more years delinquent, you could potentially lose your home to a tax sale. Fortunately, a tax sale usually only happens if you don't respond to notice from the county treasurer about getting caught up.

But if you let the tax sale go through, you'll most likely lose ownership of your property. So, if you want to keep your Oklahoma home, you must take steps to deal with the unpaid taxes before the sale is finalized.

How Do Property Taxes Work in General?

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.

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

In Oklahoma, under normal circumstances, if you don't pay your property taxes for three or more years, the county treasurer can sell your home to satisfy the unpaid debt. (Okla. Stat. Ann. tit. 68 § 3105, § 3125).

Notice of the Tax Sale

The county treasurer will send you (the record owner of the property) a notice by certified mail at least 30 days before the sale. The county treasurer must also publish notice of the sale in a newspaper once a week for four weeks. If the county doesn't have a newspaper or if it refuses to publish the notice, the information must be posted at the courthouse. (Okla. Stat. Ann. tit. 68 § 3127).

How Tax Sales in Oklahoma Work

The tax sale consists of a public auction where the county treasurer sells the home to the highest bidder. The winning bid must be at least equal to the lesser of:

• two-thirds of the property's assessed value or
• the total amount of taxes, penalties, interest, and costs due. (Okla. Stat. Ann. tit. 68 § 3129).

If no one bids the minimum amount, the treasurer bids off the property in the name of the county, and the county gets the home. (Okla. Stat. Ann. tit. 68 § 3129, § 3131). After the sale, the high bidder or the county gets a deed (title) to the home. (Okla. Stat. Ann. tit. 68 § 3131).

Redeeming the Property After a Tax Sale

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, the redemption period happens before the sale.

In Oklahoma, You Can Redeem Before the New Owner Gets the Deed

In Oklahoma, a redemption must happen before the county treasurer executes the deed to the new owner. (Okla. Stat. Ann. tit. 68 § 3113). So, most homeowners in Oklahoma don't get the right to redeem once the new owner gets a deed to the property.

To redeem the home, you must pay all accumulated taxes, interest, and costs (Okla. Stat. Ann. tit. 68 § 3113).

Limited Right to Redeem Following a Tax Sale in Oklahoma

Only under very limited circumstances will you get some additional time to redeem: Minors and incapacitated (or partially incapacitated) persons may redeem within one year after the expiration of such disability. (Okla. Stat. Ann. tit. 68 § 3113).

The amount required to redeem is the delinquent taxes plus interest and penalty (though not more than 10% per year) (Okla. Stat. Ann. tit. 68 § 3113).

When You Can Prevent a Tax Sale Even if You're Delinquent on Taxes

Some homeowners in Oklahoma can get an exemption from a tax sale. This means your home cannot be sold at a tax sale even if you're behind in paying your property taxes.

Who qualifies for a tax sale exemption. The county treasurer won't conduct a tax sale if:

• your county has a population that exceeds 100,000 people
• the property in question contains a single-family residential home
• you live in the home and are 65 years of age or older (or have been classified as totally disabled)
• the property is not being rented out
• the fair market value of the property is not more than $125,000, and
• your annual income does not exceed the HHS Poverty Guidelines at the time of the potential tax sale (Okla. Stat. Ann. tit. 68 § 3105). (Learn more about the HHS Poverty Guidelines.)

How to get a tax sale exemption. You must submit an application (along with supporting evidence) to the county treasurer before your property is sold at a tax sale (Okla. Stat. Ann. tit. 68 § 3105).

Does a Mortgage Survive a Tax Sale in Oklahoma?

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.

Getting Help

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