If your Missouri property taxes are delinquent, you could eventually lose your home after a tax sale.
If you don't pay the real property taxes on your Missouri home, you'll likely face a tax sale, which is a public auction. But the winning bidder at the sale doesn't immediately get ownership of the property.
Many homeowners will get a year-long redemption period to get caught up on the overdue taxes, penalties, interest, and fees before losing title to the home. Though you might get less time, or no time, depending on the circ*mstances.
And in limited circ*mstances, you might be able to set the sale aside (overturn it). But getting a court to set aside a sale doesn't happen very often.
Property Taxes
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 collateral for the debt.
What Are the Consequences of Not Being Able to Pay Taxes in Missouri?
All states, including Missouri, have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes.
How Tax Sales Work In Missouri
Under Missouri law, when you don't pay your property taxes, the county collector is permitted to sell your home at a tax sale to pay the overdue taxes, interest, and other charges. (Mo. Ann. Stat. § 140.150, § 140.190).
A tax sale must happen within three years, though state law permits an earlier sale if the taxes are delinquent. (Mo. Ann. Stat. § 140.160).
Public Auction
The tax sale consists of a public auction where the collector sells the home to the highest bidder, so long as the highest bid equals or exceeds the amount of the outstanding taxes, penalty, interest, and costs. (Mo. Ann. Stat. § 140.190).
Delinquent land tax sales begin at 10:00 a.m. on the fourth Monday in August and run from day to day until all parcels are offered for sale. (Mo. Ann. Stat. § 140.150, § 140.170, § 140.190).
What Happens If No One Bids the Minimum Amount?
If no one bids the minimum amount at the sale, then the collector will hold a second sale the following year. (Mo. Ann. Stat. § 140.240).
Tax sales are typically held annually. If no one bids the amount of the outstanding taxes, penalty, interest, and costs at the second offering, then the collector will hold a third sale. (Mo. Ann. Stat. § 140.250). If no one bids at this third sale, the collector is authorized to try to sell it at subsequent sales.
Certificate of Purchase
After a completed Missouri tax sale, instead of getting title to the property after the sale, the purchaser will get a certificate of purchase. (Mo. Ann. Stat. § 140.290). This certificate is evidence of the purchaser's interest in the property during the redemption period.
Notice Before a Tax Sale Takes Place in Missouri
In most cases, the tax collector must:
- publish notice in a newspaper once a week for three consecutive weeks before the sale (Mo. Ann. Stat. § 140.170) and,
- before the publication, send a notice by first-class mail, and a second notice by certified mail if the property is worth more than $1,000. (Mo. Ann. Stat. § 140.150).
How to Stop a Missouri Property Tax Sale
You can prevent the tax sale from taking place by paying the delinquent taxes, penalty, interest, and costs at any time before the sale. (Mo. Ann. Stat. § 140.150).
Can I Get My Home Back After a Missouri Tax Sale?
Many states give delinquent taxpayers the chance to pay off the amounts owed and keep the home. This process is called "redeeming" the property.
How the Right to Redeem Usually Works
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, though, the redemption period happens before the sale.
In Missouri, the redemption period happens after the tax sale.
How Long Is the Redemption Period After a Mississippi Tax Sale?
In Missouri, you can ordinarily redeem your home within one year after the tax sale and up until the purchaser gets the deed to your home—if the property sells on the collector's first or second sale attempt. (Mo. Ann. Stat. § 140.340, § 140.250).
If you don't pay off the debt during the redemption period, the purchaser can use the certificate of purchase to apply for and get a collector's deed (title) to your home. (Mo. Ann. Stat. § 140.420).
Redemption Period If the Home Doesn't Sell at a First or Second Tax Sale
If the home doesn't sell at a first or second sale, the collector will attempt to sell it at a third tax sale. When a home sells at a third tax sale, you get 90 days to redeem the property. (Mo. Ann. Stat. § 140.250).
No Right to Redeem After a Subsequent Sale
If no one buys the property at the first, second, or third tax sale, but it does sell at a subsequent offering, you don't get a redemption period. (Mo. Ann. Stat. § 140.250).
Some Homeowners Get More Time to Redeem
Minors, people who are incapacitated, and disabled persons may redeem within five years of the date of the last payment of taxes encumbering the real estate by the minor, incapacitated or disabled person, the party's predecessors in interest, or any representative of such person. (Mo. Ann. Stat. § 140.350).
Notice of Your Right to Redeem After a Tax Sale in Missouri
After the sale, you'll receive notice about your right to redeem.
If the Home Sells at a First or Second Tax Sale
At least 90 days before the date when the purchaser is authorized to acquire the deed, the purchaser must send you a notice by first-class and certified mail about your right to redeem. (Mo. Ann. Stat. § 140.405).
If the Home Sells at a Third Sale
If the property sells at a third sale, the purchaser must send a redemption notice within 45 days of the sale. The 90-day redemption period begins when the purchaser mails this notice. (Mo. Ann. Stat. § 140.405).
How Much You'll Have to Pay to Redeem Your Missouri Home
To redeem your home after the sale, you generally have to pay the following amounts to the county collector:
- the full sum of the purchase money named in the certificate of purchase
- the costs of the sale
- interest at a rate not to exceed 10% per year (but not on the amount the purchaser paid that exceeds the taxes and costs)
- all subsequent taxes that the purchaser paid plus interest, at the rate of 8% per year, and
- certain additional costs. (Mo. Ann. Stat. § 140.340).
Setting Aside a Completed Tax Sale
In some rare situations—like if the tax lien or tax sale process has defects, the taxes were paid or not owed, or excusable neglect—you might be able to invalidate a completed tax sale. The reasons that justify, as well as the procedures for, invalidating a tax sale are complicated.
If you lose your home to a tax sale and want to learn more about setting the sale aside, talk with a qualified lawyer as soon as possible.
What Options Do I Have If I Can't Afford to Pay My Property Taxes in Missouri?
Even though you'll probably get a redemption period after a Missouri tax sale, in most cases, it's better to take action before you become delinquent on your taxes to make them more affordable. You could, for example:
- find out if you meet the criteria for a property tax abatement, or
- request a change in the property's assessment if you feel your assessed property value isn't reflective of the fair market value.
Getting Help
If you're already facing a property tax sale in Missouri and have questions (or need help redeeming your home), consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.
Certainly! It seems like you're diving into the complex world of property tax, delinquency, and tax sales in Missouri. As someone deeply familiar with this domain, I can attest to the intricacies involved in these processes.
Firstly, let's touch on the concept of property taxes. They are levied on real property owners and serve as a primary source of revenue for government activities such as schools, public services, and infrastructure. These taxes are usually based on the assessed value of the property.
In Missouri, falling behind on property taxes leads to potential consequences, including a tax sale. During this sale, the county collector auctions the property to recover the overdue taxes, interest, and related fees. Winning bidders receive a certificate of purchase rather than immediate ownership.
The redemption period in Missouri allows homeowners time to settle their debts and reclaim their property. This period typically lasts a year from the sale date, but it can vary based on circ*mstances or subsequent sale attempts.
Understanding the tax sale process in Missouri is crucial. The sale usually occurs within three years of delinquency, and if the property remains unsold after multiple attempts, the purchaser may eventually obtain a deed to the property.
Redemption after a sale is possible within specific time frames, allowing homeowners to pay off the buyer's amount, including interest, to regain ownership. However, if the property goes through subsequent sales without being bought, the redemption period might be forfeited.
Special considerations exist for certain individuals, like minors, incapacitated individuals, or disabled persons, who might have extended redemption periods up to five years.
A vital aspect of this process is receiving notice about your right to redeem the property, with varying notice periods depending on the sale stage. These notices play a critical role in informing homeowners of their options and timelines.
To stop a tax sale in Missouri, settling the delinquent taxes, penalties, and costs before the sale date is essential. Seeking legal counsel becomes crucial if one aims to set aside a completed tax sale due to specific defects or circ*mstances.
For those facing challenges with property taxes in Missouri, exploring options like tax abatements or reassessment of property values could provide relief before reaching delinquency.
Should anyone find themselves in the midst of a property tax sale in Missouri, seeking assistance from qualified professionals like foreclosure lawyers, tax lawyers, or real estate lawyers is highly recommended to navigate the complexities and potentially redeem their property.
Understanding these concepts and their legal implications is vital for anyone dealing with property taxes in Missouri, as timely action and proper guidance are crucial in such situations.
