How to Save Your House from Tax Sale

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1Objecting to Tax Assessments

2Asking for Abatement

3Paying the Taxes

4Saving Your Home after a Tax Sale

5Getting Legal Help

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In every county in the U.S., homeowners can lose their homes in a tax sale if they don't pay their property taxes (and in some places their water or sewer bills). You have many options for avoiding a tax sale. For example, you could object to your tax assessments if you think they were too high, or you could ask for a reduction in your taxes (called an “abatement”) if you have suffered a temporary setback. Ideally, you will scrape together the money somehow and pay off the taxes before the sale date. However, if your home is sold at auction, then you can possibly get it back or have a judge set aside the tax sale. Because this area of law is complicated, you should seek legal advice if you have questions. Low cost legal help is available.

Steps

Method 1

Method 1 of 5:

Objecting to Tax Assessments

1. 
   1
   Obtain a copy of the assessment. You should go to your county assessor's office and request a copy of the assessment on your home. You can usually get a copy. At a minimum, you should be able to view it at the office, and in some counties you can even look them up online.

   • You have a limited amount of time to object to an assessment. Accordingly, you probably have to begin the appeal process before you get a notice of a tax sale for delinquent taxes. Start the process well before you are ever at risk of having your home sold in a tax sale.
   • If you know that you can't make your property tax payments, then you should work on objecting to the assessment as soon as possible.
2. 
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   Study your property tax assessment. Once you receive your assessment, you should study it carefully. There may be structural errors which you can challenge. For example, check the following information:

   • the lot size
   • dimension of rooms
   • number and type of fixtures in the home
   • notations about improvements made on the home
3. 
   3
   Analyze whether the value is inflated. You can also object to a tax assessment if you think the assessor has valued the home too high. To check whether you have a valid argument, consider the following:

   • How much you paid for the home. You might have paid $150,000 just last year. The value of the home should not have risen too much. If you see the home valued at $200,000, then the price could be inflated.
   • Whether you made improvements. If you haven't made any improvements to the property, then the value shouldn't spike suddenly.
   • Whether property values have been declining. Appraisers might not value the property every year. Instead, they might only value it every two or three years. If the real estate market has suddenly gone south, then your property's value might have declined as well.
4. 
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   Compare the value to comparable neighboring homes. You should be able to check the tax bill for other homes in your neighborhood. Make sure to check properties that have roughly the same square footage as yours and are about the same age.

   • If you see that your bill is wildly out of line with the bill for comparable properties, then you have a strong case for challenging the tax assessment.
   • Also consider how your house might differ from these homes. For example, your house might be in a less desirable location. You could point this out and argue that your valuation should be lower than these other houses.
5. 
   5
   Appeal the tax assessment. Your assessment letter should tell you how to appeal. The process differs depending on location, so read your letter closely and call the assessor if you have questions.

   • Generally, you must write an appeal letter or fill out forms and submit them to the appropriate board. You should involve a lawyer if you need help.
   • See Appeal Property Taxes for more information.
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Method 2

Method 2 of 5:

Asking for Abatement

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   Identify reasons for abatement. Many counties have a process for “abating” taxes. This means forgiving some or all of the taxes. An abatement is not an appeal in which you argue that the assessment was incorrect. Abatement may be granted in the following situations:

   • temporary and costly family illness
   • a parcel of property is going through probate and no one knows who the ultimate owner will be
   • you use all of your income for basic living expenses and have nothing left over to pay property taxes
   • the county made some listing error (but not an error related to the valuation of the property)
2. 
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   Meet with a lawyer. You will greatly benefit from legal advice if you are trying to get an abatement. Although it is ideal to have a lawyer help you from the very beginning, you will definitely need help if you decide to appeal an abatement denial.
3. 
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   Realize abatement is discretionary. The abatement board does not have to grant an abatement. Instead, it has the power to do so. The board realizes that if it gives an abatement to everyone who asks, then the town might become bankrupt. Accordingly, they are selective about who they award an abatement.

   • Because it is discretionary, some states might be more willing to approve an abatement than other states. For example, Vermont tends not to award abatement if people have high incomes. However, Maine might.
4. 
   4
   Gather supporting documentation. The abatement board will want to see documents that support your claimed reason for an abatement. For example, you should try to find the following:

   • Family illness: copies of medical bills and medical records.
   • Probate process: copies of court records that show the probate court has not yet determined who the owner is.
   • Poverty: detailed records showing what you spend all of your income on.
   • Mistake on the listing: copies that show the mistake.
5. 
   5
   Request abatement. Go to your county office and tell the clerk you would like to request an abatement on your taxes. You should be given a form to fill out. Follow the clerk's directions and complete the form.

   • Keep a copy for your records before submitting the form.
   • Remember to submit supporting documentation if requested.
6. 
   6
   Attend a hearing. The board should hold a meeting to consider your application. Depending on your state, the meeting might be held in private or in public. Also, in some states your attendance is mandatory because you need to answer questions. In other states, your attendance is not required.
7. 
   7
   Receive the board's decision. The board should give you a decision in writing and should explain the reasons for approving or denying your abatement request. The timeline will differ depending on where you live.

   • Read the decision carefully to see if you understand it.
   • If you don't hear anything from the board within 60 days, you should call and check.
8. 
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   Think about an appeal. Depending on where you live, you may be able to appeal the board's decision. They should tell you how to bring an appeal. Generally, you will write a letter to a higher authority and ask that they review the decision. Your rejection letter should tell you where to send the appeal letter.

   • There may be multiple appeals available. For example, you could appeal to a higher board and then, if rejected once again, appeal in court.
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Method 3

Method 3 of 5:

Paying the Taxes

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   1
   Come up with the money. To avoid the tax sale, you must pay back taxes before the deadline for the sale. You will receive a notice when the county government schedules the sale, and you will receive a deadline for paying in full the unpaid taxes and any interest or penalties. Try to come up with the money in the following ways:

   • Dip into your savings. Although you might be saving money for a rainy day, you don't want to lose your house. You should think about taking money from your savings.
   • Sell bonds, stock, etc. Sell any financial instruments to raise money.
   • Ask friends or family for a loan. If you don't owe much money, you might be able to get a friend or family member to give you a loan. Be sure to draft and sign a payment agreement.
   • Request a loan from a bank. A bank or a property tax lender might be willing to give you a loan. Check their interest rates.
   • Get a loan from a government agency. In some cities and states, you can get a loan from an agency if you qualify. For example, in Baltimore, you can get a loan if you owe no more than $1,500 and have no bankruptcies or liens on the property. You get two years to repay the loan.
2. 
   2
   Ask for a payment plan. Your taxing authority might agree to a payment plan. You should call and ask. With a payment plan, you can stretch out repayment of the back taxes over a year or more.
3. 
   3
   Pay before the deadline. Take out your notice of tax sale and check the deadline for paying. Be sure to pay before the deadline, otherwise the process of getting the house back becomes more complicated—and expensive.

   • Remember to get a receipt. Once you pay, make sure that the tax assessor gives you a receipt to show that you have paid off your taxes in full.
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Method 4

Method 4 of 5:

Saving Your Home after a Tax Sale

1. 
   1
   Receive notice of the upcoming sale. Your county government should notify you that it will be holding a tax sale. The county does not need a court's permission to hold the sale, but it typically must notify you of the sale and give you a deadline to pay your back taxes to stop the sale.

   • At the sale, the starting bids will be for the value of the unpaid taxes and any unpaid interest or penalties.
2. 
   2
   Identify the type of sale. There are generally two different types of tax sales involving property. You need to identify which type of sale is about to take place:

   • Tax deed sale. In this situation, the county sells the deed to your house. The person who buys the property gets the deed and title to the property. Of course, you still have a right to redeem the property.
   • Tax certificate sale. In some states, the county government doesn't sell your house at the tax sale. Instead, it sells a tax certificate. This certificate is basically the lien on your property. The person who buys the certificate has the power to go into court later and start the foreclosure process if you don't pay off the unpaid taxes.
3. 
   3
   Read the notice of sale. After the county holds the auction, it should notify you of the sale. You should receive notification in the mail. If you don't receive anything, then call your county tax office.

   • Ask them how long you get to redeem either the tax certificate or the deed.
4. 
   4
   Pay the tax certificate before the deadline. After the sale of the tax certificate, you continue to own the home. You will have a limited amount of time to pay off the lien and any interest and penalties. This is called “redeeming” the tax certificate. If you do, then the lien disappears and you've saved your house. If you don't, the owner of the lien can begin foreclosure.

   • The deadline for paying off the lien should be spelled out on the notice you receive after the tax sale.
5. 
   5
   Redeem your house after a tax deed sale. Most counties give you the right to redeem property after a tax deed sale. Although the new owner now owns title to your property, the law still gives you a certain amount of time to pay the new owner the amount that they paid at auction (plus interest). Once you pay off that amount, you get the deed back.

   • Typically, the redemption period lasts one to three years after the sale. However, you should contact a lawyer to double check.
   • Realize that in some states the redemption period ends before the sale.
6. 
   6
   Sue to set aside a tax sale. In some situations, you can invalidate a tax sale. You should meet with a lawyer and discuss before filing suit in court. Generally, you can set aside a tax sale for only the following reasons:

   • you paid the taxes
   • you never owed the taxes
   • the tax lien or sale process was defective, e.g., leaving off the name of one of the property owners or failing to give adequate notice of the sale
   • excusable neglect, such as mental illness or incapacity
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Method 5

Method 5 of 5:

Getting Legal Help

1. 
   1
   Check if you qualify for legal aid. Because you are having trouble paying your property taxes, you probably don't have a lot of money to spend on a lawyer. However, you may qualify for legal aid. Legal aid organizations provide low cost or free legal help to people with incomes less than 125% of the federal poverty level. Just keep in mind that this process can take time, so it is important to start as soon as possible. As of 2016, the income limits are:

   • $14,850 for an individual
   • $20,025 for a family of two
   • $25,200 for a family of three
2. 
   2
   Find legal aid. You can find the nearest legal aid office by visiting the Legal Services Corporation's website at http://www.lsc.gov/. Click on “Find Legal Aid” in the upper right corner. You will be asked to provide your address or zip code.

   • The website will then display contact information for legal aid organizations in your area.
3. 
   3
   Apply for legal aid. You probably have to apply for legal aid before you can get help. The application process is necessary to check that your income is sufficiently low and that your legal issue is one that the legal aid office handles regularly. You should gather the following information before applying:

   • sources of all income, such as wages, tips, child support, alimony, disability insurance, Social Security, etc.
   • how much money you get from each source every month
   • how much money is in each of your bank accounts
   • assets in addition to your home, such as vehicles
4. 
   4
   Get a referral to an attorney. You might not qualify for legal aid. In that situation, you should get a referral to a private attorney. You can contact your local or state bar association.

   • Once you have the name of someone, call them up and ask to schedule a consultation.
5. 
   5
   Ask if the attorney provides unbundled legal services. You might not have the money to hire a lawyer to handle the case from start to finish. However, in most states lawyers can offer “unbundled” legal services (also called “discrete task representation” or “limited scope representation”). Under this arrangement, the lawyer does only the work you give them.

   • For example, you can hire a lawyer to draft an appeal letter for you but otherwise handle the rest of your case. You might also pay for regular coaching from the lawyer.
   • Unbundled legal services can help keep your legal costs low while allowing you to get the answers and help that you need.
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