Most people aren’t aware of this, but if you don’t pay your municipal property taxes, the city or town has the right to sell your house out from under you.
Keep in mind that just because they can, doesn’t mean they necessarily will. First, the municipality cannot start the process until the third year after the taxes are due (the second year in the case of vacant land). Second, after the process is started, you have a full year to repay the taxes owing, after which it is cleared and they cannot sell your home. The municipality can also extend that year, so you can effectively have a grace period before they start enforcement. However, if you don’t pay, they can put your house up in a tax sale, and accept an offer from the highest bidder. And this is final – all you are entitled to is any profit above what is owed on taxes, your mortgage or any other amount owing against the land, and the municipality is not required to accept the highest or best price or inquire into property values.
You can check out the Municipal Tax Sales Act here.
