LEGAL CORNER: What happens when a property owner does not pay property taxes?
Lake Charles, LA (KPLC) - Legal Corner answers viewer’s civil legal questions.
QUESTION: What happens when a property owner does not pay his property taxes or his portion of property taxes? If he does not pay, does he automatically lose his property?
ANSWER: Louisiana laws allow local governments to sell property via tax sale to collect delinquent taxes.
How Louisiana Tax Sales Work
In Louisiana, tax sales occur annually, typically in May or June. Under Louisiana law, the sale may consist of a “bid down” process in which the collector sells the least amount of the property that someone will buy for the full amount due with bidding starting at 100% of the property. Bidding may continue down to 1%. (La.R.S. 47:2153).
As an alternative, upon agreement between the tax collector and the local governing authority, a bidder may elect to bid down the redemption penalty rate. (La.R.S. 47:2153).
After the sale, the tax collector will file a tax sale certificate in the public records. (La.R.S. 47:2155). The tax sale certificate transfers “tax sale title” only, which means the buyer gets limited ownership of the property, subject to the right of redemption. A tax sale certificate in Louisiana is essentially the same as a tax deed, as described in the Louisiana Constitution.
Notice of a Louisiana Tax Sale
Before the sale, the tax collector must provide notice by mail and publication.
Notice by Mail
No later than the first Monday of February of each year, or as soon thereafter as possible, the collector will mail the taxpayer a notice stating the property owner must pay the delinquent amount(s) within 20 days or as soon thereafter before the tax sale is scheduled. Otherwise, the parish or other political subdivision will proceed with a tax sale and sell the property to a new owner. (La.R.S. 47:2153).
A tax sale is still valid, even if an actual notice of the sale is not received, if the collector demonstrates a reasonable and diligent effort to provide notice of the sale. (La.R.S. 47:2153).
After the property goes to tax sale and within 90 days of the expiration of the redemption period, the tax collector must provide written notice by first class mail that the property has been sold at a tax sale and that after the expiration of the redemption period, the property cannot be redeemed. (La.R.S. 47:2153).
Notice by Publication
At least 20 days after sending the delinquent property owner the written notice, the collector must publish notice about the sale two times within 30 days in an official journal, such as a newspaper. (La.R.S. 47:2153).
How to Stop a Tax Sale from Occurring in Louisiana
A delinquent property owner can stop the sale from taking place by paying the amounts due at any time up until the day before the actual sale. (La.R.S. 47:2153).
At the time of tax sale, the delinquent property owner may pay the amounts owed, plus interest and costs due at the time of the sale, and that payment counts as a redemption. (La.R.S. 47:2163).
Redemption Period in Louisiana
In Louisiana, one generally gets three years after the date the tax sale certificate was recorded to redeem his property. (La. Const. Art. VII, § 25). Under some circumstances, the redemption period is shorter.
To redeem, one must pay the price the purchaser paid for the property at the sale, plus costs, a 5% penalty—or less if the purchaser has bid down the penalty rate at the sale—and 1% interest per month. (La.R.S. 47:2153).
After three years, the purchaser can file a lawsuit to quiet the title, which provides the purchaser with clear title and full ownership of the property. (La. Const. Art. VII, § 25)
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