5 ms·

What part do you think is unconstitutional? I think it would be very difficult to frame an argument that property tax is unconstitutional. All 50 states collect

What part do you think is unconstitutional? I think it would be very difficult to frame an argument that property tax is unconstitutional. All 50 states collect property taxes. The owner in the article had unpaid property taxes for over 3 years and apparently underpaid the amount due right before a deed sale because he miscalculated interest. It's hard to know exactly what happened from reading the article alone. A court judgement would state the facts of the case more clearly. If the miscalculation was the fault of the county, it seems like they were in error and the deed should be invalidated. If the county gave him a quote and he intentionally underpaid (for whatever reason he justified it with), I wouldn't expect him to have recourse under the law. States are broadly divided into tax deed and tax lien states. Michigan is a tax deed state and I am not familiar with the particulars of their law. I live in a tax lien state (Colorado). When you don't pay your property taxes, a lien is sold at auction. If you don't pay after 3 years, the lien holder can apply for a tax deed. This process takes 6 months. The owner is attempted to be served and notices are published in the local newspaper. You need to contact the county for the payoff amount, but the interest in general on the lien accrues monthly computed on simple interest (non compounding). The rate this year is 12%, so 1% per month. There needs to be a consequence for not paying your property taxes or few would pay them.

jakeogh 7y ago
If you must pay to continue "own" something, you dont own it.
- planteen 7y ago
  Yeah exactly. I remember when I was a kid with my dad going to the court house to pay property taxes. I was asking about property taxes and he said something along the lines of "You don't own land, you rent it from the government." It was a good explanation for a child. The internet is full of crackpot legal theories (sovereign citizen, etc) that contest this idea. None hold up in court.
  - JAlexoid 7y ago
    There's an apt joke for this: Q: Why is suicide illegal? A: Destruction of government property. Truth is - property and property rights are largely a convention that we agree upon, that convention is how state/government is created. Remember that there is only one sovereign in every single country on this planet - king, despot, president, parliament or the people. Individual sovereignty is practically non-existent. You don't own the land or your body. We just agreed to protect each other's freedoms and grant certain protected rights.
  - jakeogh 7y ago
    For primary residences, I think it's something that will get fixed at the local/state level.
DuskStar 7y ago
The unconstitutional bit is the seizure of $100k over an $8 underpayment. If your property goes to auction with a lien, the lien holder is paid back but you still get the remaining proceeds from the auction.
- planteen 7y ago
  That isn't how it works in tax lien states. The amount of money owed is irrelevant in the eyes of the county, only that you did not pay money owed in the time allotted. And as I said, they are quite clear (at least in my state) about the amount owed. A property with a tax lien does not go to auction. The property tax lien holder is more senior to all other liens, except a federal tax lien. This includes being senior to mortgages, which is why mortgage companies typically keep your property taxes in escrow (to ensure they are paid). Once a tax deed is issued, no compensation is paid to the previous owner. The title is not marketable for a period of 7 years. That is, a title company will not issue a warranted deed on a tax deed transfer. To resolve this, the deed holder needs to wait or bring a quiet title suit. The previous owner may get compensated in a quiet title action to sign a quit claim deed or similar to rectify the quiet title suit.
sizzle 7y ago
Why isn't property tax automatically taken out of a mortgage escrow account?
- planteen 7y ago
  It typically is. The mortgage company sends a check to the county when annual property taxes are due. Does your mortgage escrow work different than that?

jakeogh 7y ago

If you must pay to continue "own" something, you dont own it.

planteen 7y ago
Yeah exactly. I remember when I was a kid with my dad going to the court house to pay property taxes. I was asking about property taxes and he said something along the lines of "You don't own land, you rent it from the government." It was a good explanation for a child. The internet is full of crackpot legal theories (sovereign citizen, etc) that contest this idea. None hold up in court.
- JAlexoid 7y ago
  There's an apt joke for this: Q: Why is suicide illegal? A: Destruction of government property. Truth is - property and property rights are largely a convention that we agree upon, that convention is how state/government is created. Remember that there is only one sovereign in every single country on this planet - king, despot, president, parliament or the people. Individual sovereignty is practically non-existent. You don't own the land or your body. We just agreed to protect each other's freedoms and grant certain protected rights.
- jakeogh 7y ago
  For primary residences, I think it's something that will get fixed at the local/state level.

DuskStar 7y ago

The unconstitutional bit is the seizure of $100k over an $8 underpayment. If your property goes to auction with a lien, the lien holder is paid back but you still get the remaining proceeds from the auction.

planteen 7y ago
That isn't how it works in tax lien states. The amount of money owed is irrelevant in the eyes of the county, only that you did not pay money owed in the time allotted. And as I said, they are quite clear (at least in my state) about the amount owed. A property with a tax lien does not go to auction. The property tax lien holder is more senior to all other liens, except a federal tax lien. This includes being senior to mortgages, which is why mortgage companies typically keep your property taxes in escrow (to ensure they are paid). Once a tax deed is issued, no compensation is paid to the previous owner. The title is not marketable for a period of 7 years. That is, a title company will not issue a warranted deed on a tax deed transfer. To resolve this, the deed holder needs to wait or bring a quiet title suit. The previous owner may get compensated in a quiet title action to sign a quit claim deed or similar to rectify the quiet title suit.

sizzle 7y ago

Why isn't property tax automatically taken out of a mortgage escrow account?

planteen 7y ago
It typically is. The mortgage company sends a check to the county when annual property taxes are due. Does your mortgage escrow work different than that?