Tyler v. Hennepin County, 598 U.S. ___ (2023), is a United States Supreme Court case about government seizure of property for unpaid taxes where the value of the property seized was greater than the tax debt. A unanimous court held that the surplus value is protected by the Fifth Amendment's Taking Clause.
More than a dozen states allow what some call “home equity theft.” Thus, the court’s ruling will impact homeowners across the country, especially where the tax buyer is a governmental entity such as the Cook County Land Bank. However, property taxes, which are rising in many states and are a significant expense for many homeowners, are also important to municipalities. Property tax revenue is used to support critical governmental infrastructure and services. Therefore, a delicate balance will need to be achieved moving forward.
The Supreme Court noted in its ruling that “most states and the federal government require excess value to be returned to the taxpayer whose property is sold to satisfy an outstanding tax debt.” If you have lost your property to a tax deed and had equity in the property (the value exceeded the taxes due), please contact our office to explore your options. We look forward to working with you.