What Happens If I Don't Pay Property Taxes in Wisconsin?

If you don't pay your property taxes in Wisconsin, the county can acquire the deed to your home using one of three methods. It can then sell the property.

But you usually get at least two years to pay off the delinquent amounts and "redeem" the property before the county can get ownership of your home.

How Do Property Taxes Work in General?

People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt. All states have laws that allow the local government to sell a home through a tax sale process (or get title to the property in another way) to collect delinquent taxes.

Is Wisconsin a Tax Lien or Tax Deed State?

Again, when you don't pay your property taxes, the past-due amount becomes a lien on your home. Each state has a different tax sale process to collect delinquent taxes.

Tax Deed States

In some places, the taxing authority sells the home if the homeowner doesn't pay off the debt. But the purchaser might not get the deed to the property right away. Sometimes, a redemption period must expire before the buyer receives the deed.

In Wisconsin, the county gets a tax certificate if you don't pay your taxes. After the redemption period expires (see below), the county can then get the deed to your home by:

• recording a tax deed
• foreclosing the tax certificate using the same process that a mortgage lender would use to foreclose, or
• following a special foreclosure procedure called an "in rem" foreclosure. (In this process, the county files a petition with the court, along with a list of all tax-delinquent properties being foreclosed.) (Wis. Stat. § 74.57.) (See below for more information on these processes.)

After the county gets ownership of your property, it will sell the home to a new owner. (Wis. Stat. § 75.35.)

Wisconsin is generally considered a tax deed state.

Tax Lien States

In other places, the taxing authority sells the tax lien, and the purchaser must foreclose or use different procedures to get a deed to the property.

Wisconsin doesn't sell tax liens.

Other Tax Sale Procedures

And in some other places, a tax foreclosure process is used. Or the taxing authority simply executes its lien by taking title to the home. As noted earlier, the county could use a foreclosure process to a deed to your property.

Wisconsin Tax Certificates

On September 1 of each year, the county treasurer issues the tax certificate, which includes all parcels with unpaid taxes as of the close of business on August 31. (Wis. Stat. § 74.57). The county treasurer will mail you (the homeowner) a notice within 90 days after issuing the tax certificate. (Wis. Stat. § 74.59).

After the county issues a tax certificate, if you don't pay off the delinquent amounts during the redemption period (see below), the county can get title to your home using one of the following processes. (Wis. Stat. § 74.57).

By Recording a Tax Deed

The county can apply to the county clerk for a tax deed after giving you notice. The county clerk will then issue a deed to the county, and the county will record the deed. (Wis. Stat. §§ 75.12, 75.14).

By Foreclosing the Tax Certificate in the Same Way a Mortgage Lender Would Foreclose

The county may instead choose to foreclose the tax certificate using the same process as a mortgage foreclosure. (Wis. Stat. § 75.19).

By Foreclosing the Tax Certificate With a Statutory "In Rem" Foreclosure

The Wisconsin statutes also provide an "in rem" statutory procedure for foreclosing a tax certificate. In this process, the county files a petition with the court, along with a list of all tax-delinquent properties being foreclosed.

Like with a mortgage foreclosure, you (the owner) will receive notice of the action, and you may file an answer if you choose to do so. The county must also publish notice in a newspaper as part of the process. If the county proves its case, the court will issue a judgment of foreclosure, and you'll lose ownership of the home. (Wis. Stat. § 75.521).

How Long Is the Redemption Period in Wisconsin?

Most people in Wisconsin get two years to pay the delinquent taxes, penalties, interest, and other costs before the county can start the process to get title to the property. (Wis. Stat. § 74.57). (Paying off the tax debt is called "redeeming" the home.)

In some circumstances, however, the redemption period is limited to one year. For example, if the county incurred expenses bringing the property to an erosion-free condition, the redemption period is one year.

When Does the Redemption Period Start in Wisconsin?

The redemption period usually starts when the county treasurer issues the tax certificate. (Wis. Stat. § 74.57.)

But the start date for the redemption period is delayed in a few situations. For example, if the treasurer doesn't mail a notice about the certificate to you, the start of the redemption period is deferred. In that scenario, the redemption period begins on the mailing date. (Wis. Stat. § 74.59.)

How Much It Costs to Redeem the Home in Wisconsin

The amount you'll have to pay to redeem the home depends on the process the county uses to get title to your property.

How much it costs to redeem if the county records a tax deed. If the county uses a tax deed process, you must pay the amount of the unpaid taxes plus the interest, penalties, and any other charges authorized by law. (Wis. Stat. § 75.01.)

How much it costs to redeem if the county forecloses using the same process that a mortgage lender would use to foreclose. If the county uses the mortgage foreclosure process, you must pay the amount of the tax certificate plus costs allowed by the court. (Wis. Stat. § 75.19.)

How much it costs to redeem if the county forecloses using an "in rem" foreclosure process. If the county uses the "in rem" foreclosure process, you must pay the amount listed in the foreclosure petition plus interest, foreclosure costs, and publication costs. (Wis. Stat. § 75.521.)

When Your Right to Redeem Ends in Wisconsin

When your right to redeem terminates also depends on which process the county uses to get the deed to your home.

How long you get to redeem if the county records a tax deed. You can redeem at any time before the recording of the deed. (Wis. Stat. § 75.01.)

How long you get to redeem if the county forecloses using the same process that a mortgage lender would use to foreclose. If the county forecloses the tax certificate as it would a mortgage, then you can redeem before the foreclosure sale. (Wis. Stat. § 75.19.)

How long you get to redeem if the county forecloses using an "in rem" foreclosure process. If the county files an "in rem" petition with the court to foreclose, it must publish notice in a newspaper as part of the process. You get at least eight weeks after the first publication to redeem. (Wis. Stat. § 75.521.)

What Happens After the County Gets Title to the Home

After the county gets ownership of your property, it will sell the home to a new owner. (Wis. Stat. § 75.35.)

Repurchasing Your Wisconsin Home From the County

You can purchase the home from the county if you have enough money available. (Wis. Stat. § 75.35.)

But repurchasing the property will probably be a lot more expensive than simply paying the past-due amounts during the redemption period because you'll most likely have to pay the home's fair market value or more. You might also have to compete with other buyers.

Getting Help

If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay. If you're about to lose your home because of delinquent property taxes and have questions (or need help redeeming your property), consider talking to a foreclosure, tax, or real estate lawyer.