Baltimore—After a hard day at work, you head home and pick up your mail. In the mailbox is a notice from Baltimore City that your home is now in a tax sale. Tax sale happens when you have delinquent property taxes on the prior year’s tax bill or citations for such things as broken windows.
A person’s home can go into a tax sale for a debt of as little as $750 if the house is owner-occupied and $250 for other properties. The city will use tax sales to collect the unpaid bills by selling the debt against the property. This is called a lien. The lien on the home is sold at an auction where they sell a debt as a “lien certificate” on the property. Only the debt is sold at this auction, not the property itself. Once the lien is put up for auction, an investor can buy it and the homeowner can try to redeem it.
The tax sale system is complicated. Below is a timeline to visualize each step.
- The city mails a tax bill to the homeowner in July.
- If that bill goes unpaid, the city sends a final bill and legal notice during the first week of February.
- If the bill is still unpaid, the city will advertise the houses that are on the tax sale list in March. This list is published in The Daily Record.
- At the beginning of April, the city will mail another tax sale notice. The homeowner has until April 30th to pay the outstanding taxes and charges down (below $750) to avoid a tax sale.
- The auction will be conducted in May. The city will then inform the property owner that a lien certificate for their taxes has been purchased.
At this point, the process of redemption can be started.
Before you start the redemption process, you must know if your home is classified as owner-occupied or non-owner-occupied. This is essential because there are different rules for people who live in a home that is considered non-owner-occupied.
You determine your home’s status by searching for it on the Maryland Department of Assessments and Taxation (SDAT) Real Property website at https://sdat.dat.maryland.gov/RealProperty/Pages/default.aspx. Just insert your home address.
The initial period of redemption is up to seven months after the auction date for an owner-occupied home. To redeem, the homeowner would pay the city the amount of liens, interest and any current-year taxes owed. For non-owner-occupied, the initial period is shortened to four months.
After the initial period of redemption, the process gets more complicated. To redeem, there is a two-step process:
Step 1: The homeowner must contact the person or group that purchased the tax lien on the homeowner’s property. Then, the homeowner must pay them any costs incurred like court filing fees and attorney fees. When the homeowner makes this payment, they should request that the tax lien purchaser provide a payoff statement.
Step 2: The homeowner must then pay the city for the amount of the lien with any interest, as well as the current year’s taxes.
Further, there are assistance programs that can provide aid. The first one is the Homeowners’ Property Tax Credit Program. This program limits the amount of property taxes a homeowner must pay based on their income. To learn more, you can call SDAT at 410-767-5900.
The next program you can use is the Maryland Homestead Property Tax Credit Program. This program helps lower the overall amount owed in taxes by limiting the increase in taxable assessments each year to a fixed percentage. To learn more, you can call SDAT at 410-767-2165.
Baltimore City’s Emergency Mortgage & Housing Assistance Program can also help. This program aids people at risk of foreclosure due to economic hardship from the COVID-19 pandemic. To learn more, you can call Baltimore City Department of Housing and Community Development at 410-396-3023.
Finally, there is Baltimore City’s Tax Sale Deferral Program. This program removes homeowners from the current tax sale this year. To learn more, you can call the Baltimore City Tax Sale Ombudsman at 410-396-3000.
Maryland Volunteer Lawyers Service provides legal assistance for those in tax sale. You can contact our intake line at 410-547-6537 or apply online at https://mvlslaw.org/free-legal-help/.
Courtland Merkel is a staff attorney at Maryland Volunteer Lawyers Service.