Home Lost (and Re-Gained) Over a Tiny Tax Bill
Wow, this sucks. A couple from Slidell, LA lost their home, which had been mortgage free since 1968, over a wayward tax bill of $1.63 (plus $0.10 in interest). The couple didn’t realize they should be expecting a tax bill when this all started because their home’s value had previously been below the states $75,000 homestead exemption such that they had never had to pay property taxes. But that all changed when their home was re-assessed at $75,100 in 1996, resulting in the tiny tax bill that was then sent to a rural route address that no longer existed because it had been upgraded to a street address when the local 9-1-1 system was established. The bill was returned undelivered, and the following year their home was sold at the Sherriff’s tax sale. The good news is that, with the help of an anonymous benefactor, they just settled a lawsuit that had kept their home in legal limbo ever since snatched out from under them.
Published on July 20th, 2007 - 13 Comments
Filed under: Real Estate, Taxes
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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While I am relieved about the outcome of the case, I’m so saddened that the couple had to go through this horrible ordeal. I hate to think what would’ve happened if they didn’t have a benefactor.
I love reading your blog.
Comment by Laura — Jul 21st 2007 @ 1:29 pmWow, that’s rough. We unfortunately do have a tax bill that we need to pay; if for some reason it ever goes away, this will certainly be something that I would have to keep an eye out for!
I’m surprised that they never tried to update their records when the letter was returned to sender.
Comment by Blaine Moore — Jul 21st 2007 @ 2:46 pmThanks for your printing of my story and all the many people who were outraged that they could just give my property away and never let me know. This has a great ending but we will now be working on legislation so this can never happen to anyone else in our system. Dolores Atwood Slidell La
Comment by Dolores Atwood — Jul 22nd 2007 @ 11:44 amOh what a terrible shock for those couple, they might have never even dreamed about something like this…
Comment by Personal Finance Guide 101 — Jul 23rd 2007 @ 5:59 amA house went up for sale, and nobody in the Slidell Sheriff’s office thought it a little strange that someone would give up their house for $1.63? Might that not be worth a phone call? I’m flabbergasted.
Comment by mbhunter — Jul 23rd 2007 @ 11:02 pmThat’s incredible. Surely the fault should lie with the billing department for not getting the bill to the home owner. If it was returned undelivered you would assume that there would be some kind of policy for putting the letter back into the system and finding the homeowners new details. It’s not as if they refused to pay the bill, they never knew about it. What a crazy system.
Comment by used vans girl — Jul 24th 2007 @ 7:54 amSo if the IRS sends a new assessment, along with a tax bill, to some random address because of their stupidity…
“the tiny tax bill that was then sent to a rural route address that no longer existed because it had been upgraded to a street address when the local 9-1-1 system was established”
…their fault. Shouldn’t the IRS be liable for damages here? I mean, the mail came back undelivered. They failed, in my opinion on purpose, to issue them the assessment and the tax bill. I say on purpose, because they sure had no problem finding the house when they sold it!
Comment by Chris — Jul 24th 2007 @ 11:14 amSince this was property taxes, the IRS wasn’t involved. But yes, it seems that it’s the county’s fault for not dealing with this properly. Funny thing is, it’s probably the county that was responsible for transforming the rural route addresses into street addresses, but it seems that they didn’t bother to update their taxpayer records.
You gotta love Louisiana. Thanks in part to the homestead exemption, effective property tax rates on apartments are 17 times the rates on single-family homes, according to the National Multi Housing Council, an organization of large apartment owners. Is this a great country or what?
Comment by Minimum Wage — Jul 24th 2007 @ 1:13 pmActually nickel, with our county’s billing system, it makes absolutely no difference if I ever receive a bill from them, or if they ever actually send me one. It doesn’t absolve me of my responsibility to pay. I actually have to know when my bills are supposed to arrive.
Comment by mbhunter — Jul 24th 2007 @ 5:59 pmYou also gotta love Michigan. They have a “circuit breaker” income tax credit which rebates property taxes above a certain percentage of income.
And the really great part is that homeowners can get the rebate based on property taxes BILLED even if the taxes are not yet paid (and are delinquent) the same year of the tax return claiming the tax credit. Haven’t paid your 2006 property taxes yet? No problem, file a tax return and claim your tax credit. Is this a great country or what?
Comment by Minimum Wage — Jul 24th 2007 @ 7:31 pmmbhunter: Are you seriously laying the blame on these people? They hadn’t previously been on the hook for property taxes, so how were they supposed to know when a bill that had never come before, and which they weren’t expecting, would be due? Even if the county isn’t responsible for being sure that a bill gets delivered (and they’re arguably not – credit card issuers will give you the same line of bull about a bill being nothing more than a courtesy), they sure as hell should be responsible for notifying the owners before they sell the property, especially given that they knew full well that the bill had never been delivered. Your response is surprisingly heartless.
Minimum Wage: What’s your point? Beyond whining about tax breaks that you don’t qualify for, is there a larger point here that relates to some old people having their house sold out from under them? You’re feeling disenfranchised. I get it. But please try to stay on topic.
While I agree that the home should never have been lost over a piddly tax delinquency like this (and ESPECIALLY in a case like this where the county is at fault for not keeping its files up to date), I thought it was worth noting just a couple of the enormous (in aggregate) advantages homeowners get from government in this country.
For every homeowner who loses their home over (preferentially favored) property taxes, there are probably dozens of renters who lose their homes (get evicted or priced out) over the excessive property taxes on their homes.
Comment by Minimum Wage — Jul 25th 2007 @ 1:36 am