Past Due Property Taxes in California
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What Happens If I Don't Pay Property Taxes in California
In California, you generally have five years to get current on delinquent property taxes. Otherwise, you could lose your home in a tax sale.
What Is a Property Tax Lien?
If you own real property, you’re responsible for paying property taxes on that property. The government uses that tax money to pay for schools, public services, libraries, roads, parks, and the like. Usually, the tax amount is based on the assessed value of the property.
When a homeowner doesn’t pay the property taxes, the overdue amount becomes a lien on the home. A lien effectively makes the property act as collateral for the debt.
What Happens if You Don’t Pay Property Taxes in California
All states, including California, have a process that allows the taxing authority to sell a home to collect delinquent taxes. (Learn about your options to avoid a tax sale if you can’t keep up with the property taxes.)
Property Tax Sales in California
Property on which taxes remain unpaid at 12:01 a.m. on July 1 becomes what’s known as “tax-defaulted” land. In most cases, if the property is tax-defaulted for at least five years, the county tax collector has the power to sell that property to satisfy the delinquent taxes. (Cal. Rev. & Tax. Code § 3362). (In the case of a nuisance abatement lien, the property becomes subject to the tax collector's power to sell after three years. Cal. Gov. Code § 38773.5).
Look out for Legal Changes
In this article, you’ll find details on property tax sale laws in California, with citations to statutes so you can learn more. Statutes change, so checking them is always a good idea.
Most tax-defaulted homes are sold at a public auction. Though, the sale could be through a sealed bid sale, or through a negotiated sale to a public agency or qualified nonprofit organization.
How You’ll Find Out About a Tax Sale
In California, the tax collector must give you a written notice, as well as contact you personally, if possible, before selling your home at a tax sale.
Notice Before a Tax Sale
Under California law, the tax collector must send a notice of the proposed sale by certified mail not less than 45 days nor more than 120 days before the sale to your last known mailing address. (Cal. Rev. & Tax. Code § 3701). It must also publish the notice in the newspaper or, if there are no newspapers in the area, post the notice in three public places. (Cal. Rev. & Tax. Code § 3702).
Tax Collector Usually Must Also Try to Contact You Personally
If the home is your primary residence, the tax collector must make a reasonable effort to personally contact you (the owner-occupant) not more than 120 days nor less than ten days before the sale. If the collector is unable to contact you, the collector must try to serve you a written notice not less than five days before the sale. (Cal. Rev. & Tax. Code § 3704.7).
How to Stop a Tax Sale in California: Pay the Delinquent Amounts
You get five years after you fall behind in taxes to get current on the delinquent amounts. Paying off the debt is called “redeeming” the home. After five years, if you don’t redeem, the tax collector can sell your home. (Cal. Rev. & Tax. Code § 3691).
You may choose to pay the delinquent amounts in installments at any time up until 5:00 p.m. on the last business day prior to the date when the tax collector gets the right to sell the property. (Cal. Rev. & Tax. Code § 4217). So long as you keep up on the installments, the collector can't proceed with a sale. (Cal. Rev. & Tax. Code § 4218).
How Do Tax Lien Sales Work?
Again, most tax sales in California are public auctions. (Cal. Rev. & Tax. Code § 3693). At the auction, the winning bid must be at least as much as the amount it would cost for you to redeem the home, plus costs, which includes:
the amount of the defaulted taxes
delinquent penalties and costs
redemption penalties, and
a redemption fee. (Cal. Rev. & Tax. Code § 3698.5).
Generally, You Can’t Redeem Your California Home After a Tax Lien Sale
In California, you don’t get the right to redeem the home after the sale. Your right to redeem expires at the close of business on the last business day prior to the sale date. (Cal. Rev. & Tax. Code § 3706, § 3707). If you send in the redemption amount via mail or any other method, the tax collector must receive it by that deadline. (Cal. Rev. & Tax. Code § 3707). California law doesn’t provide an extended right of redemption after the sale as in some other states.
But if your home doesn’t sell or the purchaser who bought it at the sale backs out of the deal, your right to redeem revives (Cal. Rev. & Tax. Code § 3693.1, § 3707).
Tax Lien Certificate Sales in California
California law also gives counties the ability to sell tax lien certificates—rather than selling tax-defaulted homes—if authorized by a resolution of county board of supervisors. (Cal. Rev. & Tax. Code § 4511, § 4521). A tax lien certificate gives the purchaser the right to collect the tax debt. California counties usually don't sell tax lien certificates.
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