Getting Your Home Back After a North Carolina Property Tax Sale

If you lose your house owing to outstanding North Carolina property taxes, you generally have a limited length of time to redeem it.

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. When taxes are not paid, the taxing authority will either sell the lien (and if you do not pay the past-due sum to the lien purchaser, that party may foreclose or use another way 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 become behind on your North Carolina real estate taxes, you may lose your house to tax foreclosure. A mortgage-type foreclosure, which is akin to a judicial foreclosure, or an in rem tax foreclosure, which also goes via the court system, will be used. As part of the foreclosure process, your house will eventually be sold to a new owner. If you do not halt the process by catching up on the outstanding payments, you will only have a limited period of time after the sale to regain the property by “redeeming” it.

How to Redeem Your North Carolina Mortgage-Type Tax Foreclosure

The tax collector files a case against you in court to undertake a mortgage-style foreclosure. Your house will be sold to a new owner when the court issues a judgment. Following an upset-bid period, the court must confirm the transaction to complete it.

How to Redeem the Property After It Has Been Sold

You may pay the loan in full—that is, redeem the property—at any moment before the sale is confirmed under North Carolina law. (North Carolina General Statutes 105-374).

How Much Does It Cost to Redeem?

To redeem, you must pay all back taxes, current taxes, interest, penalties, and expenses. (North Carolina General Statutes 105-374).

How to Redeem Your North Carolina Home in a Tax Repossession

With an in rem foreclosure, the tax collector files a paperwork with the court, thus creating a judgment, and sends you notice. The court may order an execution after three months, and the sheriff will sell your house to settle the tax obligation. 105-375 (North Carolina General Statutes).

Again, the bidding is kept open for 10 days following the sale in case an upset offer is submitted. Each each ten-day upset bid period begins with a fresh upset bid. You may also redeem the property before the upset-bid period expires. (North Carolina General Statutes 105-375, 1-339.57). Payment in full of the judgment, including interest and fees, voids the judgment under North Carolina law. 105-375 (North Carolina General Statutes).

How to Reduce Your Property Taxes

Consider looking into other methods you may make your taxes more inexpensive to prevent getting behind on your property taxes in the first place. For example, before you become behind on your taxes, you could:

fulfill the requirements for a property tax abatement or be able to appeal the assessed value of your house (if you believe it is inaccurate) in order to minimize the amount of taxes you must pay.