If you do not pay your Maryland property taxes, you will lose your house in a tax sale. However, you will have some time to regain the property. Find out how long you have after a tax sale to redeem your home.
If you fail to pay your Maryland property taxes, the tax collector may sell your house in a tax sale to make up the difference. However, a tax sale will be announced in advance, and you will have the opportunity to “redeem” your house after the sale.
To redeem your house after a tax sale, you must pay up the past-due payments, as well as many additional charges, within a certain time frame.
Is Maryland a State of Tax Liens or Tax Deeds?
When you fail to pay your property taxes, the amount owed becomes a lien on your house. This form of lien nearly often takes precedence over other types of liens, including mortgages.
To recover overdue taxes, each state has its own tax auction mechanism.
Taxation States
If the homeowner does not pay up the obligation, the taxation authorities may sell the residence. However, the purchaser may not get the deed to the property immediately away. Before the buyer obtains the deed, a redemption period may have to expire.
States with Tax Liens
In other cases, the taxing body sells the tax lien, and the purchaser must foreclose or utilize other methods to get a deed to the property.
The winning bidder in a tax auction in Maryland receives a certificate of sale (basically, a tax lien certificate). Maryland Code Ann., Tax-Prop. 14-820.) If you do not pay the unpaid taxes within the redemption period, the purchaser will foreclose your right to redemption (see below) and take ownership of your house.
Additional Tax Sale Procedures
In certain cases, a tax foreclosure procedure is followed, or the taxing body just enforces its claim by acquiring ownership of the residence.
How Do Maryland Property Tax Lien Sales Work?
When your Maryland taxes get over due, the collector may sell your property in a tax sale to pay off the back taxes. Maryland Code Ann., Tax-Prop. 14-808.)
Your property will be auctioned at the tax sale, which is a public auction, to the highest bidder willing to pay at least the entire amount of all taxes outstanding, plus interest, penalties, and selling charges. Maryland Code Ann., Tax-Prop. 14-817.)
The successful bidder receives a certificate of sale after the auction. Maryland Code Ann., Tax-Prop. 14-820.) The winning bidder cannot yet take possession of your property because Maryland law requires a “redemption period” during which you may pay off the loan. The certificate of sale proves the successful bidder’s ownership of the property throughout the redemption period.
Within 60 days of the tax sale, the collector must mail you a notice including information on the sale and your ability to redeem the house. Maryland Code Ann., Tax-Prop. 14-817.1 If you do not repay the amount within the redemption term, the purchaser will foreclose your right of redemption and take possession of your house.
How Long Is the Redemption Period for Maryland Tax Liens?
In most cases, the purchaser must wait six months before using your right of redemption. Maryland Code Ann., Tax-Prop. 14-833.)
As a result, Maryland homeowners typically have at least six months following the sale to redeem their house. These six months are known as the “redemption period.”
How Long Does the Owner Have After a Tax Sale in Baltimore City to Redeem the Property?
However, in Baltimore City, the redemption time for owner-occupied residential properties is nine months from the date of sale. (Maryland Code Ann. Tax-Property 14-833.) During this period, you may pay up the tax bill and keep the purchaser from taking possession of your home.
Redemption Periods for Some Abandoned and Other Homes Have Been Reduced
In rare circumstances, the successful bidder may be able to begin the foreclosure process sooner.
For example, if a person or organization purchases a certain kind of abandoned or unoccupied property, or if the governing body of a county or municipal corporation acquires a certificate of sale, the foreclosure may begin at any time following the sale date. Maryland Code Ann., Tax-Prop. 14-833.)
Reduced Redemption Period for Some Repair-Needy Homes
If the house requires considerable repairs or will need substantial repairs within six months to comply with the local building code, the purchaser may be allowed to begin the foreclosure process at any time after 60 days from the selling date, depending on the conditions. Maryland Code Ann., Tax-Prop. 14-833.)
Your Right to Redeem Must Be Foreclosed By The Winning Bidder
Again, after six months, the winning bidder may foreclose your right of redemption in court and obtain ownership to your house. Maryland Code Ann., Tax-Prop. 14-833.)
Typically, the successful bidder must provide you with two notifications before proceeding with the foreclosure. The winning bidder cannot initiate foreclosure proceedings until at least two months after the first notification and at least 30 days after the second notice. Maryland Code Ann., Tax-Prop. 14-833.)
Tax Sale Foreclosure in Maryland
The winning bidder must file a complaint in court to begin the foreclosure process. Maryland Code Ann., Tax-Prop. 14-833.) The court sends summonses to all identified defendants once the tax lien certificate holder files a complaint. The court will also order the foreclosure procedure to be published, and the matter will continue through the legal process.
After a court passes a decree terminating your right of redemption, the foreclosing purchaser receives a deed to the residence. Maryland Code Ann., Tax-Prop. 14-847.)
How to Redeem Your Maryland Property After a Tax Sale
To redeem your house following a tax sale, you must pay the redemption amount to the County or Baltimore City. Payment must be made in certified monies, such as a cashier’s check or a bank money order.
What Must the Homeowner Do After a Tax Sale to Redeem the Property?
To redeem the property following a tax sale, you must once again pay the redemption price. In general, the redemption amount is:
the entire overdue amount paid at the tax auction for the property by the successful bidder, plus interest any further taxes, interest, and penalties Except in rare situations, the winning bidder paid all taxes, interest, and penalties that incurred after the tax sale, as well as certain charges like as postage and certified mailing costs for the appropriate notifications, lawyers’ fees, and title search fees. Maryland Code Ann., Tax-Prop. 14-828, 14-843.)
The amount varies according on how long you wait to redeem. The longer you wait to redeem, the more you will have to pay.
When Your Redeeming Right Expires
You may redeem until your right to redemption is eventually terminated. Maryland Code Ann., Tax-Prop. 14-827, 14-833.)
When the Foreclosure Right Expires
If the winning bidder does not begin foreclosure proceedings within two years of receiving the certificate of sale, the certificate becomes null and invalid, and the bidder loses all rights to your property. Maryland Code Ann., Tax-Prop. 14-833.)
If you do not pay the late sums, your property will most likely be auctioned at another tax sale.