Behind on Property Taxes in Michigan?

Back Taxes in Michigan: Your Options

This page explains what happens in Michigan when property taxes on land go unpaid. It covers the return of delinquent taxes to the county treasurer, the fees and interest, forfeiture, the court foreclosure, the March 31 deadline to redeem and the claim for leftover sale proceeds.

In Michigan the county treasurer (or the state in some counties) is the foreclosing governmental unit. Land is usually foreclosed about two years after the taxes first go delinquent. You can pay or sell until the foreclosure takes effect. This page is general information, not legal or tax advice. For your own parcel, ask your county treasurer.

When Michigan property taxes go delinquent

Your local city or township collects the current year's taxes. On March 1 of the next year, unpaid taxes are returned to the county treasurer as delinquent (Michigan Treasury foreclosure timeline). From then on, you pay the county treasurer.

Fees and interest

When taxes are returned delinquent, a 4 percent administration fee is added, and interest runs at 1 percent a month, not compounded. If the land forfeits a year later, redemption adds interest of one half percent a month counted back from the March 1 before forfeiture, plus recording fees and notice costs. Fixed fees are also added along the way (Michigan Treasury foreclosure timeline).

What the county does next: forfeiture and foreclosure

The county treasurer sends notices during the first year of delinquency. On March 1 of the second year, land with unpaid delinquent taxes forfeits to the county treasurer. Forfeiture does not take your title yet (Michigan Treasury foreclosure timeline).

The foreclosing governmental unit then files a foreclosure petition in circuit court, visits the property and sends certified notice. It holds a show cause hearing, then a court hearing early in the year. The court enters a judgment of foreclosure, which takes effect on March 31. That is the last day to redeem. Title then passes to the foreclosing unit, which can offer the land at auction later that year (Michigan Treasury foreclosure timeline).

Redemption

You can redeem by paying the county treasurer all delinquent taxes, interest, penalties and fees through March 31 of the foreclosure year. Ask the treasurer for an exact payoff well before the deadline.

Some people facing foreclosure of a home may qualify for help paying taxes. The Treasury taxpayer resources page lists state programs and county contacts.

Claiming leftover sale proceeds

If foreclosed land sells for more than the amount owed, the former owner and others with an interest can claim the remaining proceeds. To keep that right, you must send Form 5743, Notice of Intention to Claim Interest in Foreclosure Sales Proceeds, to the foreclosing governmental unit by July 1 after the foreclosure takes effect (Michigan Treasury taxpayer resources). Miss that date and you can lose the claim.

Your options if you are behind

Your best choice depends on the land, the amount owed and how close March 31 is.

• Pay the full amount owed, with penalties, interest and costs, before the next step in the process.
• Ask the tax office whether it offers a payment plan, and get the terms in writing.
• Sell the land before the deadline. The back taxes are paid from the sale at closing.
• If the land was inherited, gather the death certificate and any will or probate papers early, because a sale needs someone with authority to sign.
• If the numbers are large or a deadline is close, talk to a real estate attorney.

Selling land with back taxes in Michigan

You can sell land with delinquent or forfeited taxes before the foreclosure takes effect. At closing, the title company gets a payoff from the county treasurer and pays it from the sale price. The buyer gets title free of the tax lien.

If a foreclosure judgment is coming, tell your buyer and the title company the March 31 date right away.

EasyLotBuyer buys vacant land in Michigan for cash, including lots with back taxes, liens, title issues or no road access, and land from heirs and estates. We make a cash offer within 24 hours, charge no fees or commissions, and pay the closing costs. We can close in as few as 7 days. Back taxes are paid at closing from the sale.

Where to check your tax status

Current-year taxes: your city or township treasurer. Delinquent taxes and payoffs: your county treasurer. Michigan Treasury's forfeiture and foreclosure page explains the process and links county contacts.