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.
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.
So, if you're a homeowner in Virginia and you're delinquent in paying your property taxes, you could potentially lose your home to a tax sale after a judicial process (basically, a tax foreclosure). Fortunately, a tax sale usually only happens if you don't respond to notice from the tax collector about getting caught up.
But you'll lose your home if you let the tax sale go through.
In most cases in Virginia, if your property taxes are delinquent on December 31 following the second anniversary of the due date, the locality can start a foreclosure on your home by filing a lawsuit in court seeking permission to sell the property. (Va. Code § 58.1-3965). (The foreclosure can start on the first anniversary of when the taxes became due for some properties, like condemned structures, derelict buildings, or properties that are declared blighted.)
If you don't take steps to stop the sale—either by providing a valid defense or by getting caught up on the delinquent amounts—the court will issue a judgment. Then, your home will be sold, typically at a public auction. (Va. Code § 58.1-3969). If no one bids on the property, the county, city, or town can purchase it at the sale. (Va. Code § 58.1-3970).
After the sale, the new owner will get a deed (title) to your home, and you'll lose ownership permanently. (Va. Code § 58.1-3965).
At least 30 days before starting the lawsuit, the tax collector must send you (the property owner) a notice. The notice must also be published in a newspaper at least 30 days before the foreclosure. (Va. Code § 58.1-3965).
Paying off the tax debt to prevent the sale is called "redeeming" the home. To redeem the property, you must pay all accumulated taxes, penalties, reasonable attorneys' fees, interest, and costs, typically by 5:00 on the day before the auction. (Va. Code § 58.1-3965). Check with the county treasurer to find out the exact deadline where you live.
Under Virginia law, if you can't afford to pay the entire overdue amount at once, you can enter into an agreement to pay in installments over an extended period, though no longer than 72 months. (Va. Code § 58.1-3965).
If you fall behind in your payments, the treasurer or other officer responsible for collecting the taxes can void the agreement upon 15 days written notice. Then, the foreclosure will proceed. (Va. Code § 58.1-3965).
Also, you won't be eligible to enter into another installment agreement for that property within three years of the default. (Va. Code § 58.1-3965).
Many states allow delinquent taxpayers to pay off the amounts owed and keep the home, even after a tax sale happens. This process is also called "redeeming" the property.
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, like Virginia, the redemption period happens before the sale.
In Virginia, you can't redeem your home after a tax sale.
Property tax liens have priority. So, a tax sale process can eliminate mortgages (and deeds of trust). If your mortgage loan isn't escrowed and you don't pay the property taxes, the loan servicer will usually pay them to stop a tax sale from happening.
Most mortgages say the lender can add the amount it paid for the taxes to your loan. You'll then have to make repayment arrangements with the servicer or potentially face a foreclosure.
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 Virginia and have questions or need help redeeming your property, consider talking to a foreclosure, tax, or real estate lawyer.