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

Homeowners in Oregon who don't pay their property taxes can lose their home to a tax foreclosure.

If you get behind in paying your real property taxes in Oregon, you might lose your home to tax foreclosure. Fortunately, you'll get some time before and after a tax foreclosure judgment to pay off the debt, which is called "redeeming" the property. You then get to keep your home. But if you fail to redeem, you'll lose ownership of the property.

What Is a Property Tax Lien?

People who own real property have to pay property taxes. The government uses the money that property taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the amount of property taxes that a homeowner must pay is based on the assessed value of the property.

When Oregon 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.

What Happens if You Don't Pay Property Taxes

All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. (Learn about your options to avoid a tax sale if you can't keep up with the property taxes.)

Overview of How Tax Foreclosures in Oregon Work

In Oregon, property taxes that aren't paid on or before May 15 of the tax year in which they're billed are delinquent. The property is subject to a tax foreclosure three years after the first date of delinquency. (Or. Rev. Stat. § 312.010, § 312.050). The county prepares a list called a "foreclosure list" of all properties subject to foreclosure. It then applies for a judgment with the court and publishes the foreclosure list in a newspaper. (Or. Rev. Stat. § 312.040).

Once the court issues a judgment of foreclosure, the redemption period (see below) begins. If you don't pay off the taxes, interest, fees, and penalties during the redemption period, the tax collector will deed your home to the county. (Or. Rev. Stat. § 312.200). At this point, you lose all rights to the property, and the county may choose to sell it to a new owner.

Notice of a Tax Foreclosure in Oregon

Before the tax foreclosure, the county in which your property is located must either send you notice by both regular and certified mail, or personally serve you notice. (Or. Rev. Stat. § 312.040).

Also, if notice is sent by mail, the foreclosure will be published in a newspaper of general circulation in the county. (Or. Rev. Stat. § 312.040). But it will probably be buried in the fine print—you're not likely to run across it.

Responding to a Tax Foreclosure in Oregon

You can file an answer to the foreclosure with any defenses you want to bring up, like you actually paid the taxes. You must file your response within 30 days after the foreclosure list is first published, excluding the first day of publication. (Or. Rev. Stat. § 312.070).

If you don't have a valid defense, you'll have to get caught up on what you owe before the judgment to stop the foreclosure. Before the foreclosure list is published, you can get your home out of foreclosure by paying the delinquent taxes and interest. After the list is published, you can stop the foreclosure proceeding at any time before the court issues a judgment by paying the delinquent taxes, plus interest and a penalty of 5% of the total amount of taxes and interest charged against the property. (Or. Rev. Stat. § 312.110).

Redemption Period After a Tax Foreclosure in Oregon

In Oregon, you get two years, called a "redemption period," after the foreclosure judgment to pay off the delinquent taxes, plus interest, penalty, and fees, to prevent the county from getting your home. (Or. Rev. Stat. § 312.120). In some circumstances, though, like if you commit waste or move out of the home and certain criteria are met, you'll lose part of your redemption period. (Or. Rev. Stat. § 312.122).

If you don't redeem, the county will get a deed (title) to your home. Your right to redeem the property expires on execution of the deed to the county. (Or. Rev. Stat. § 312.200). Once the property is deeded to the county, your ownership rights are terminated. After the county gets title to your home, it will probably sell the property to a new owner. (Or. Rev. Stat. § 312.270). If you still want to get the home back, you might then be able to repurchase the property, but it's up to the county. (Or. Rev. Stat. § 275.180).

Notice of Expiration of Redemption Period

Not less than one year before your right to redeem ends, the tax collector must mail you a notice that includes the redemption period's expiration date. (Or. Rev. Stat. § 312.125).

In most cases, the tax collector must also publish a general notice in the newspaper about when the redemption period expires. The publication must occur not more than 30 days nor less than ten days before the expiration date. (Or. Rev. Stat. § 312.190).

Talk to an Oregon Attorney

If you're facing a tax foreclosure in Oregon, consider talking to a foreclosure lawyer, a real estate lawyer, or a tax lawyer with experience in property tax matters to learn about your different options and rights.

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