Property Tax Post: The Sometimes Somber Pitfalls of Property Tax Liens


For many people, the greatest benefit of homeownership is the long-term security it provides. However, outstanding property tax liabilities can cancel out years of paying down mortgages for the unwary homeowner.

That was exactly the case for an 80-year-old Albion, Maine couple, Richard and Leonette Sukeforth, who were evicted for failing to pay a $6,500 outstanding tax obligation, according to the Morning Sentinel.

Apparently, tax foreclosure sales have been known to disproportionately affect the elderly more than other groups. A 2012 National Consumer Law Center report cited that elderly and disabled homeowners face the highest risk of losing their homes in property tax foreclosure sales.  As such, those of us with elderly friends and loved ones may want to familiarize ourselves with what tax-relief programs, if any, are available for senior homeowners.

Many states provide a tax exemption on at least some portion of property’s assessed value for individuals within a certain age range. For example, in Alabama, single-family, owner-occupied dwellings of individuals over age 65 may qualify for an exemption against up to $4,000 of the property’s assessed value. Texas also offers a homestead tax exemption, but the state has gone one step further to allow persons that are 65 or older (or disabled) to apply for an abatement of a pending tax suit, a deferral of tax collection or an abatement of a foreclosure sale if the individual owns and occupies the property as a homestead.  Some states, like New Jersey, offer a “senior freeze” program, where taxpayers 65 or older or disabled may qualify for reimbursement from property tax increases. However, to obtain a reimbursement, the taxpayer must have paid their taxes in full—meaning that the program might not be as useful for people in situations similar to the Sukeforths.

With respect to Maine, foreclosure proceedings may be initiated against a taxpayer at least eight months but no more than one year after the taxes become due. The taxpayer is, however, entitled to notice before the proceedings are initiated, giving them at least 10 days to pay before the proceedings are initiated. The state allows assessors to abate property taxes on the primary residence of a person who is unable to pay due to hardship. This likely explains why Maine Gov. Paul LePage (R) reportedly expressed frustration over the fact that the Sukeforths had been evicted.  In response to this incident, the Governor plans to take steps to “change the foreclosure law as it relates to poverty” by including a requirement in the law that tax sale foreclosure properties be sold at fair market value rather than for the outstanding tax obligation so that money obtained for the property in excess of the tax lien can go to the taxpayer.

Legislatures in states with high percentages of elderly or disabled individuals could possibly prevent tax sale evictions among the elderly or disabled by establishing abatement programs or exemptions such as those available in Texas, which strongly favor the taxpayer. Although Maine’s laws seemingly do provide taxpayers with an opportunity to seek relief from tax foreclosure sales, requiring properties subject to tax sale foreclosure to be sold at fair market value could very well provide an extra layer of protection for elderly taxpayers.

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn:  Does your home state offer tax relief or the elderly or disabled?

Get a free trial to Premier State Tax Library , a comprehensive research service that delivers deep, unique analysis and time-saving practice tools to help practitioners make well-informed decisions.