Returning to Your Home Following a Colorado Property Tax Sale

After a tax lien sale, you may redeem your house in Colorado.

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.

When you become behind on your property taxes in Colorado, the county treasurer (or its agent) may arrange a tax lien auction, which is commonly held on the Internet. The tax lien on your property is then auctioned off to the highest bidder. The successful bidder receives a certificate of purchase as well as the right to collect any outstanding money from you. You have the option to pay up the unpaid sums, plus interest, and “redeem” the house within a certain time frame. However, if you do not pay off the past-due payments, plus interest and charges, the purchaser of the lien may ultimately take title to the property.

Right to Redeem Following a Tax Lien Sale, in General

Most states allow delinquent taxpayers to “redeem” their house after a tax sale by paying the buyer the amount paid at the auction or paying the taxes owing, plus interest, penalties, and expenses. In certain places, the redemption period takes place prior to the sale. However, if you do not redeem, the purchaser will be able to get title to the house free and clear of any liens that existed prior to the sale.

During the redemption period, the homeowner usually has the right to dwell in the house. The length of the redemption period varies by state; one year to three years is normal. However, in certain places, the time limit is substantially shorter.

What Is the Redemption Period Following a Colorado Tax Lien Sale?

In Colorado, you have a three-year redemption period after the sale to redeem the property. 39-11-120 (Colo. Rev. Stat.). If you haven’t redeemed your certificate of purchase after three years, the holder of the certificate of purchase may apply to the treasurer for title to your house and get a deed to it.

You have the option to redeem at any moment before the treasurer signs the treasurer’s deed, transferring ownership to the purchaser. 39-12-103 (Colo. Rev. Stat.).

How Much Money Will You Need to Redeem Your Colorado Home?

To redeem your Colorado property after the tax lien sale, you must pay the following:

the amount of the delinquent taxes the amount of the delinquent interest\s costs, like newspaper advertising fees\s redemption interest from the date of sale, and\s all taxes accruing on the home after the sale, which the purchaser paid, and that are endorsed on the certificate of purchase, plus redemption interest. 39-12-103 (Colo. Rev. Stat.).

However, you are not required to pay any additional money that the victorious bidder paid to purchase the lien. 39-11-115 (Colo. Rev. Stat.). You must refund the purchaser for the whole price paid for the lien in certain states, but not in Colorado.

What Happens If You Don’t Redeem?

After three years, the person or organization that purchased the lien at the foreclosure auction may get title to your house by seeking a deed from the treasurer. 39-11-120 (Colo. Rev. Stat.).

Expiration Date for the Redemption Period

The treasurer sends you a notification by personal service or registered or certified mail at least five months and no less than three months before the deed is issued. The notification will contain information such as when the redemption period finishes and when the tax deed will be issued. 39-11-128 (Colo. Rev. Stat.).

How to Reduce Your Property Taxes

Even though you will have a redemption time after a Colorado tax lien sale, it is usually advisable to take action before your taxes become late in order to make them more inexpensive. For example, you could:

Find out whether you qualify for a property tax abatement, or seek a revision in the property’s assessment if you believe the assessed value is less than the fair market value.