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How To Get Your Home Back After a Property Tax Sale in Indiana?
Unless you have abandoned your home / property – you may be able to redeem your home in Indiana after losing it to a tax sale.
If your property taxes go unpaid in Indiana, you could lose your home to a tax sale. Many people are unaware that following the sale of your property you get some time to buy back the home. This period of time is known as a redemption period. If you abandon the property or don’t pay up during the redemption period, you then lose your chance to keep your property / home in Indiana.
If you don’t pay your property taxes in Indiana, the county treasurer may sell your property to a new owner at a tax sale during an auction.
You have the right to redeem your home after a tax sale. At the auction, your home is sold to the highest bidder. However, the sale is subject to your right of redemption. ** You get a certain amount of time in which to pay off the debt in order to get your house back or REDEEM your property.
- No more than 90 days after the sale, the person who bought your home at the sale (the purchaser) must send you a notice about your right to redeem the home (Ind. Code § 6-1.1-25-4.5).
- You can’t redeem if you abandon the home. In the past, Indiana law gave homeowners 120 days to redeem the home even if they had abandoned (that is, permanently moved out of) the property. However, a new law passed in 2015 (SB 415) took away this right. Now, there is no right to redeem your home if it is vacant and abandoned (Ind. Code § 6-1.1-25-4).
Contact us immediately to learn more as your rights have time limits!
What is a Property Tax Sale?
If you are unable to pay your property taxes, your home could be subject to a court’s decision that can result in the selling off of unpaid tax debt in an auction. The purchaser of the delinquent tax debt is then granted a certificate which indicates their interest in the property. Following the purchase of the delinquent debt, the homeowner then has a period of time in which they can pay off the remainder of the debt and reclaim their property from the buyer – this is also known as the redemption period. If they are unable to do so, the buyer will become the property’s new owner.
How Much Will You Have to Pay to Redeem Your Home In Indiana?
To redeem your home after a tax sale, you’ll likely have to pay:
- 110% of the minimum bid required at the auction (which includes taxes, penalties, and costs) if you are redeeming the property within six months after the sale date
- 115% of the minimum bid amount if redeeming the property more than six months, but not more than one year, after the sale date
- 5% per year on the amount of the purchase price that exceeds the minimum bid amount
- 5% per year on any subsequent taxes or special assessments that the purchaser paid in the year after the sale
- all additional taxes, special assessments, interest, penalties, and fees on the property that accrued after the sale, and
- costs (Ind. Code § 6-1.1-25-2).
How is a tax sale related to Chapter 13 Bankruptcy?
A little known fact is that declaring Chapter 13 Bankruptcy can halt a tax sale before it occurs. It can also stop the sale after it occurs if bankruptcy is filed during the grace period before all delinquent payments are due. Although property taxes are not dis-chargeable after filing Chapter 13, your debts can still be paid through monthly payments to your trustee.
Halting a tax sale is possible due to the fact that, when Chapter 13 is filed, the purchaser may not hold an absolute title to it. As such, the original property owner may not have a time limit to pay off the rights to redeem ownership of the property. Thus, a Chapter 13 debtor could be the key to retaining ownership of an original property that is subject to a tax sale.
If you find your home subject to a property tax sale and need legal aid in retaining it, contact the Law Offices of Moseley & Martinez for help today! We can give you the legal representation you need! Call today for a consultation and case review.