If your Washington property taxes are three or more years delinquent, you could potentially lose your home to a tax sale after a foreclosure process. Fortunately, a tax sale usually only happens if you don't respond to notice from the tax collector about getting caught up.
But if you let the tax sale go through, you'll most likely lose ownership of your property.
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.
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.
In Washington, once your yearly taxes are three years delinquent, the county can start a foreclosure. (Wash. Rev. Code § 84.64.050).
After your property tax payment is three years overdue, the county treasurer will issue a certificate of delinquency, which is filed with the court clerk. (Wash. Rev. Code § 84.64.050). This filing starts the foreclosure process.
The county will serve you in person (or by publication in a newspaper and by mail) notice of the court action and a summons. You get 30 days to respond to the foreclosure action or pay the past-due amounts to stop the foreclosure. (Wash. Rev. Code § 84.64.050).
A notice of sale is also posted publicly for ten days. (Wash. Rev. Code § 84.64.080).
You can pay the overdue amounts, including taxes, interest, and costs, and stop the foreclosure at any time before the close of business the day before the sale. (Wash. Rev. Code § 84.64.070). Getting current on the delinquent amounts is called "redeeming" the property (see below).
If you don't cure the default, the court will issue a foreclosure judgment, and the county treasurer will sell your home at a public auction to the highest bidder. The minimum bid must be the owed amount of taxes, interest, and costs. The county treasurer then issues a tax deed, which gives title to your home to the winning bidder. (Wash. Rev. Code § 84.64.080).
Some states allow a homeowner who loses their home to a tax sale to get the house back by paying off the overdue amounts or by reimbursing the purchaser for the amount paid at the sale, plus various other amounts. This is called "redeeming" the home.
In Washington, you generally don't get the opportunity to redeem your home after the tax foreclosure sale.
In Washington, you get a three-year period before the sale to pay off the delinquent amounts (including taxes, interest, and costs). This is also called "redeeming" the home.
You must make your payment before the close of business on the day before the auction. (Wash. Rev. Code § 84.64.070).
To prevent a foreclosure sale, you'll have to pay to the county treasurer:
In Washington, if the county treasurer forecloses on the home of a minor or legally incompetent person for the nonpayment of taxes, that person gets three years after the sale date to redeem the home (Wash. Rev. Code § 84.64.070).
In these cases, the redemption amount consists of:
Because a property tax lien has priority, mortgages (and deeds of trust) get wiped out if you lose your home through a tax foreclosure 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 by your lender.
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 foreclosure in Washington and have questions or need help redeeming your property, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.