Tax Sale

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Tax Sale

A transfer of real property in exchange for money to satisfy charges imposed thereupon by the government that have remained unpaid after the legal period for their payment has expired.

Tax sales are authorized by state statutes to collect taxes that are long overdue to the state government from negligent or unwilling individuals.


Any sale of real property for delinquent taxes must be conducted in compliance with legally imposed requirements, or it is not valid. Ordinarily the tax collector is required to make and publish a list of property on which taxes have not been paid. Such a list must contain an adequate description of each parcel of land to be sold, the owner's name, the amount due, and the period of time for which the taxes are due. The interest permitted by law on the delinquent taxes, penalties for default in payment, and the costs incurred for the sale may be included in the amount due. Certain states mandate that this delinquency list must be filed or recorded in the office of the county clerk, and statutes may indicate specifically the newspapers in which the list is to be published.


The purpose of a notice of a tax sale is to warn the owner of the property that it will be sold and to furnish information to prospective buyers. Failure to provide notice to the owner renders any subsequent sale of the property invalid. This rule is consistent with due process requirements that any individual must be given notice and opportunity to defend himself or herself before being deprived of his or her property. The notice given to the owner must adequately describe the property, the amount of tax owed, and for what years it is due.


State statutes regulate the manner in which tax sales may be conducted. Ordinarily the sale is open to the public in order to ascertain that a fair price for the property will be obtained in the open market. A private sale is valid, however, when authorized by statute.


The general rule is that land offered at a tax sale must bring at least the total amount of taxes due on it, plus legal costs and charges. In some jurisdictions, a sale for a smaller amount is invalid.

In the event that the land is sold at the tax sale for a price that exceeds the amount owed, the sale might be valid, depending upon the state; however, the excess must be given to the delinquent taxpayer.


Any individual who is not disqualified by statute may purchase land at a tax sale provided he or she is the highest bidder. Upon payment of the amount bid, the buyer will be given a tax deed that serves as proof of his or her ownership of the property. Certain states mandate that a tax sale be confirmed in a court proceeding before the purchaser actually takes title or ownership to the property.

A state, county, Municipal Corporation, or other governmental unit may buy land sold at a tax sale only if authorized by statute.


The owner of property that is the subject of a tax sale is given a statutory right of redemption—that is, if, within a certain period, the owner pays the back taxes plus any other legal charges due, he or she will regain complete ownership of the property free of the prior tax debt. The public policy behind such a statute is to provide the taxpayer with every reasonable opportunity to redeem property since Forfeiture of land has always been regarded as a drastic remedy. Generally any individual interested in the property sold for taxes is entitled to redeem it if his or her interest in the property will be affected by the purchaser taking complete ownership of the land, such as in the case of an individual who has a life estate in the property.

Redemption must occur within the time and in the manner specified by the statute.

Sale Prohibited

Courts can proscribe a tax sale in cases where (1) a sale would be unlawful, so that the buyer's ownership of the land would be open to question; (2) the taxes have been paid; (3) the levy or assessment was unlawful or fraudulent; or (4) the valuation was grossly excessive.

Where errors or irregularities exist in the assessment that could have been rectified if promptly brought to the attention of the proper authorities, the tax sale will not be enjoined if such errors have no effect upon the substantial justice of the tax or the liability of the property for its satisfaction.

Further readings

Lilienthal, Christopher. 2003. "Tax Sale Set Aside: Officials Failed to Examine Past Due Taxes: County and Township Tax Offices Failed to Use 'Common Sense Business Practices'." Pennsylvania Law Weekly (March 31).

Sacks, Michael E. 1998. "Escape Clause in Tax Sale Law Under Review by High Court." Pennsylvania Law Weekly (November 9).

Stone, Lin. 1998. How to Buy Land at Tax Sales. Ed. by James Criswell. Kansas City, Mo.: Truman.

tax sale

n. an auction sale of a taxpayer's property conducted by the Federal government to collect unpaid taxes.

References in periodicals archive ?
But finish paying before your unpaid bill has to be sent to possible auction at the Tax Sale.
steps involved both in the tax collection and actual tax sale process.
When a mailed notice of a tax sale is returned unclaimed, a state must take additional reasonable steps to attempt to provide notice to the property owner before selling their property, if it is practicable to do so (Jones v.
A recent tax sale in Cook County (Chicago), Illinois generated $53 million, and of 90,000 to 100,000 properties auctioned each year year, 35 percent are sold.
They showed how to get all the county information on tax sale properties at the click of a button, how to easily filter the tax sale list to only the properties that are of interest, and how to find the best properties for a particular bidding strategy.
The Tax Collector and Mayor of Dade County have approved a tax sale policy that allows Wall Street hedge funds and other large institutional investors to enjoy a "special status" whereby these funds are allowed to submit literally hundreds of thousands of bids for every one bid submitted by a citizen of Miami-Dade.
O'Neill asked, "Can one cent make the difference between a valid tender, and an invalid tender, in relation to a municipal tax sale conducted under the Municipal Tax Sales Rules?
Marie, City tax collector Garry Mason received council's approval to proceed with the tax sale of the company's headquarters on Bay Street next year.
The board could also allow the land to go to a tax sale to pay off the tax liability.
He persuaded the Supreme Court justices to adopt eBay's view of a major patent infringement challenge last term, and also argued cases involving the Fair Labor Standards Act; the definition of "enterprise" in the Racketeer Influenced and Corrupt Organizations Act; due process in tax sale notices; price discrimination under the Robinson-Patman Act; and retaliation under Title VII of the Civil Rights Act of 1964.
They will be able to register for the tax sales, research the tax sale properties, choose which properties to bid on and get help in placing their bids.