Iowa law allows you to regain your house following a tax sale during a redemption period.
If you do not pay your property taxes on time, the amount owed becomes a lien on your house. This form of lien nearly often takes precedence over other types of liens, including mortgages. In general, if taxes are not paid, the taxation authorities will eventually:
Sell the lien (and if you do not pay the past-due sum to the lien purchaser, that party may foreclose or use another mechanism to get title to the house), or sell the property itself in a tax sale.
In certain areas, however, no auction is made; instead, the taxation body enforces its lien by acquiring ownership to the residence. The taxation body is then required by state law to dispose of the property, typically by selling it. Before conducting a sale, the taxation authority in some countries utilizes a foreclosure procedure.
If you fail to pay your property taxes in Iowa, the county treasurer may auction your property, or a portion of it, in a tax sale to pay off the arrears. But you won’t face a tax sale without being given enough notice, and you’ll have the opportunity to recover (or “redeem”) your property after the sale since, under Iowa law, you may reclaim (or “redeem”) your property even after someone else buys it during a tax sale. However, if you do not pay the outstanding sums, plus interest, penalties, and charges, within the redemption time, the purchaser takes over ownership of your house.
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How Property Tax Sales Work in Iowa
If you do not pay your property taxes, the county treasurer has the authority to sell your house, or a portion of it, at a public auction. (See Iowa Code Ann. 446.15.) The property is offered for sale at the public sale, which takes place on the third Monday in June unless a different date is designated by the treasurer, to the bidder who is willing to take the smallest percentage of the property, but not less than 1%, for the total amount of taxes, interest, costs, and fees due. (446.16, 446.7 Iowa Code Ann.)
Following the sale, the successful bidder receives a certificate of purchase, subject to your right of redemption (see below). (See Iowa Code Ann. 446.29.)
Iowa Tax Sale Notification
The treasurer must notify you both before and after the transaction.
You will get notice prior to an Iowa tax sale. The treasurer must send you notification by May 1st, unless May 1st falls on a Saturday or Sunday, in which case the notice may be issued on the first working day in May. The treasurer must also place one notice in a newspaper at least a week before the sale, but no more than three weeks prior. 446.9 of the Iowa Code Ann.
Following an Iowa tax sale, take note. The county treasurer must notify you that the property was sold in a tax sale within 15 days of the transaction. (See Iowa Code Ann. 446.2.)
How Long Do You Have to Redeem Your Property Following an Iowa Tax Sale?
The redemption term is usually one year and nine months following the transaction. (447.9 Iowa Code Ann.) However, the redemption period may be shorter in certain cases, such as if the house did not sell at a prior tax auction or in the case of some abandoned properties. If you need assistance determining how lengthy the redemption time is in your specific circumstance, consult with a lawyer.
You also get some more time to redeem.
When the redemption time expires, the person or organization that has the certificate of purchase must send you a notification that your right to redeem is about to expire. This notice offers you an additional 90 days to redeem once the notice has been served. (447.9, 447.12 Iowa Code Ann.)
If you do not redeem within 90 days, your right to do so expires. The recipient of the certificate will then get a deed to your property and become the new owner. (See Iowa Code Ann. 448.1.)
What Will It Cost to Redeem My Iowa Home Following a Tax Sale?
To redeem your property after an Iowa tax auction, you must pay the county treasurer the following:
the price that the purchaser paid at the tax sale, including a charge for the certificate of purchase 2% interest per month, and\s the total amount of any taxes the purchaser paid for any following years, plus interest. (See Iowa Code Ann. 447.1.)
Getting Your Home Back After a New Owner Takes It Over
After the new owner receives the deed to the property, you may be able to reclaim your Iowa home by filing a court action. You could only do this in very specific situations, such as if the purchaser failed to notify you that your right to redeem was about to expire. (447.8, 448.6 Iowa Code Ann.) Consult an attorney if you want to understand if it is feasible to reclaim your house once the new owner receives a deed to the property.
How to Lower Your Iowa Property Taxes Before You Fall Behind
While Iowa law allows for a redemption time after a tax sale, it is preferable to take actions to make your taxes reasonable before you fall behind. For example, if you believe your home’s assessed value is inaccurate, you might submit an appeal. In general, the assessor assesses a property’s value after examining factors such as the home’s worth in comparison to previously sold comparable properties and local market circumstances.