Have you ever miscalculated a bill? Typically, a late fee or a strongly worded warning follows. But do you know what happens if you miscalculate and underpay your property taxes
— even by just a few dollars?
In at least 12 states, the government will seize your property, sell it, and leave you with nothing.
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Property taxes must be paid, and it’s legal for governments to take property to pay an outstanding debt. But the government shouldn’t keep any more money beyond what’s owed. The rest is your property: home equity that you’ve worked hard to build.
In courts and legislatures, Pacific Legal Foundation fights to protect your nest egg and prevent governments from stealing homeowners’ equity.
Consider the case of Uri Rafaeli, who owned a home in Oakland County, Michigan. He mistakenly underpaid his property taxes by $8.41. To cover the debt, the county sold the property at auction for $24,500 and kept every penny of the proceeds. On July 17, 2020, the Michigan Supreme Court ruled that counties cannot steal the savings people stored away in their homes.
The Michigan Supreme Court has dealt a blow to county treasurers with a new ruling, finding that counties can’t keep any profits they get from selling tax-foreclosed homes at auction.
When a Michigan retiree accidentally underpaid his county property tax bill by $8.41, he lost his house and all of the equity in it. Oakland County seized the property and sold it, ultimately pocketing about $25,000 beyond the tax debt owed.
Jim Boerner, a disabled veteran in Mesa, Ariz., recently landed in the headlines after losing his home over $236 in unpaid property taxes. Boerner had tried to pay off his property tax debt to the county but was given wrong information and therefore failed to save his home from the auction block. An investor bought the property for $4,400 and offered to sell it to him for more than $26,000 or face eviction.
The Prince of Motown himself, Marvin Gaye, sang that “Life’s a Game of Give and Take.” But for county treasuries across the state of Michigan, it’s more like a game of take, and take, and take some more.
An 83-year-old retired engineer in Michigan underpaid his property taxes by $8.41. In response, Oakland County seized his property, auctioned it off to settle the debt, and pocketed nearly $24,500 in excess revenue from the sale.
Uri Rafaeli is an 83-year-old engineer and great-grandfather. He never expected the government to treat him like a drug dealer or gang banger. But last year the Michigan Court of Appeals held that a county government could use civil asset forfeiture—the same legal process used by police to confiscate drug lords’ mansions—to seize a modest rental property Mr. Rafaeli owned because he accidentally underpaid his property taxes by $8.41.
This article was co-authored by Daniel Dew, legal policy director for Pacific Legal Foundation. Jim Manley lives with his family in Phoenix, where he litigates in defense of individual liberty for PLF. Can the government seize your home over an $8 property tax miscalculation and leave you with nothing? In Arizona, and a shrinking number ...
Editor’s note: In July 2020, the Michigan Supreme Court ruled in favor of Uri Rafaeli, preventing the government from foreclosing on private property for unpaid property taxes, and keeping all the proceeds. This is a major victory for property owners in Michigan and is an important step in ending Home Equity Theft nationwide. *** Uri ...
Many American communities are suffering from a housing shortage. Affordable housing is disappearing, new homes aren't being built quickly enough, and the racial disparities in housing availability are widening. In Michigan alone, the numbers are stark: a recent report on housing needs by the Michigan State Housing Development Authority (MSHDA) sugg ...
A few years ago, my husband and I rented a car while visiting Italy. We had great fun driving to small towns off the beaten path. But about six months after we returned, I received a $250 ticket in the mail for accidentally driving onto a "locals only" road. If we had received the ticket ...
PLF client Uri Rafaeli accidentally underpaid the property taxes on his Southfield Michigan house by $8.41. So Oakland County took Rafaeli's house to collect on the small debt. The County also took PLF client Andre Ohanessian's 2.7 acres of valuable land in Orchard Village to collect a $6,000 debt. The County sold both properties and ...
During the last recession, Gary Guidotti, a 78-year old electrician in Cascade County, Montana, fell behind on his property taxes. Under Montana's tax law, the county took his home because of the $1,125 tax debt and sold it to investors for pennies on the dollar. Guidotti lost everything while investors reaped a windfall—taking absolute title ...
Help us end the practice of home equity theft for good. Your support helps us bring additional legal challenges and legislative solutions to protect the home equity of hardworking Americans.
