The US Supreme Court has ruled that state and local governments cannot seize and sell homes of people with unpaid taxes, keeping the proceeds beyond the amount owed. The justices ruled 9-0 in favour of a 94-year-old woman who battled tax authorities in Minnesota. The court overturned a lower court’s decision to throw out Geraldine Tyler’s proposed class action lawsuit accusing Hennepin County of violating her rights under the US Constitution’s Fifth Amendment. Under Minnesota’s tax regime, the state takes “absolute title” of a property if an owner fails to pay property taxes for five years. After covering expenses, any remaining proceeds are given to the local school district, city and county.
Citing Realty.Economictimes.IndiaTimes, the U.S. Supreme Court has ruled that state and local governments cannot seize and sell homes of people with unpaid property taxes and keep the proceeds beyond the amount owed. The practice has been deemed unconstitutional in a ruling that favored a 94-year-old woman who fought tax authorities in Minnesota.
The Supreme Court justices ruled 9-0 in the property rights case to overturn a lower court’s decision to throw out Geraldine Tyler’s proposed class action lawsuit accusing Hennepin County of violating her rights under the U.S. Constitution’s Fifth Amendment. Tyler had owed roughly $15,000 in property taxes, including interest and fees. The county foreclosed on her home and in 2016 sold it at auction for $40,000, keeping the balance for its own use.
“A taxpayer who loses her $40,000 house to the state to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed,” Chief Justice John Roberts wrote for the court. “The taxpayer must render unto Caesar what is Caesar’s, but no more,” Roberts added.
Under Minnesota’s tax regime, the state takes “absolute title” of a property if an owner fails to pay property taxes for five years. Under the system, counties may keep any tax-delinquent property for a public purpose or sell it to other government entities or private buyers. After covering expenses, any remaining proceeds are given to the local school district, city, and county. None is refunded to the former owner.
“I’m happy about what this win will mean for a whole lot of people, but especially seniors who would otherwise lose their savings and be put out on the street,” Tyler said in a statement released by the Pacific Legal Foundation conservative legal group, which represented her. “Today’s decision is a major victory for property rights in the United States,” said Christina Martin, an attorney with the group. “The court’s ruling makes clear that home equity theft is not only unjust, but unconstitutional.”
Tyler’s lawyers said in a court filing that 13 other states have similar policies that let government or private investors benefit when a property is sold for more than the amount owed in taxes, including Michigan, Pennsylvania, and Texas. The ruling could have implications for those states.
The decision is significant for seniors and other vulnerable populations who may have difficulty paying their property taxes. It ensures that they will not lose their homes and any remaining proceeds from the sale will be refunded to them. It is also a victory for property rights and limits the power of state and local governments to seize private property for public use without just compensation.
To summarize, the U.S. Supreme Court has made it clear that state and local governments cannot seize and sell homes of people with unpaid property taxes and keep the proceeds beyond the amount owed. This practice has been deemed unconstitutional and violates the rights of property owners under the Fifth Amendment. The decision is a victory for property rights and ensures that vulnerable populations are protected from losing their homes due to unpaid property taxes.
