Can Someone Take Your Property by Paying the Taxes?

If you own a house or other property in the United States, and have a mortgage or deed to that property, can someone take your property by paying the taxes on it? Yes, if you fail to pay your taxes.

A city, town or a third party who holds your property’s tax title may take possession of your property and sell it at a tax sale. It is also possible for that person to foreclose on your property if you do not redeem the tax lien certificate issued by the city or town or otherwise exercise your right of redemption, which we will discuss in more detail below.

Buying at a tax sale

If the taxes on your property are in arrears, and you do not pay them, the city or town may sell it to a buyer at a tax sale. This is a way for the city or town to get back money it is owed on your property, and in some jurisdictions, the buyer can actually receive title to the home rather than just the certificate of purchase.

The sale of your property to a buyer at a tax sale is only available when there are no other liens on your property, and you have not received a notice from the city or town threatening that they will foreclose on your home. However, if you do have other liens on your property (such as a mortgage lien), and you do not settle those liens before selling your home, then the county may foreclose on your home if you fail to pay off those other liens within the time allowed by law.

Not paying your taxes can have dire consequences, though!

One of the most common ways that a town can take your property is to place a tax lien on it. You can receive a notification from your town threatening to foreclose on your home if you do not pay the tax debts on your property within 30 days of receiving that notice.

Another way for a town to take your property is by filing a lawsuit in the Land Court. In the lawsuit, the town or a third party who holds your tax title may begin a foreclosure case by filing a complaint against you, the owner of the property. The purpose of the suit is to obtain a judgment of foreclosure, which gives the city or town full ownership of your property and cuts off your right to reclaim it by paying what you owe.

Six months after a taking, sale or assignment of your property’s tax receivable has occurred, the city, town or a third-party holder of your tax title may begin a foreclosure case in the Land Court. This type of case is called a tax foreclosure, and it must be filed in the Land Court with a copy of the tax taking document or collector’s deed, any assignment or transfer of the tax title to a third party and a copy of the assessing map.