Fall behind on your tax bills and the state not only will take your home, but keep all the proceeds while squandering a lot of equity too. And look at that fine company you’re keeping in the list of states that allow this theft. Just when you thought governments couldn’t be anymore corrupt.
There are 12 states plus the District of Columbia that allow governments to keep the whole property and all sales proceeds: Maine, Massachusetts, New York, New Jersey, Illinois, Alabama, Minnesota, South Dakota, Nebraska, Colorado, Arizona, and Oregon.
But that’s not all, other states have loopholes.
Another nine states have various loopholes, mostly allowing the government to keep such properties for public use (like in Alaska, California, Idaho, Nevada, Ohio, and Rhode Island). Montana allows the government to keep all proceeds from the sale of commercial properties, not residential ones. Texas allows governments to sell properties at a discount in some circumstances. Wisconsin allows governments to keep the properties, but if they sell them, excess proceeds go back to the original owners, according to Pacific Legal Foundation (PLF), a nonprofit that has been tracking and litigating the issue.