In Nebraska, counties can take your home over taxes due — and keep all the money

LINCOLN, Neb. (KLKN) – Nebraska is one of a few states that allows local governments to sell someone’s house and keep the profit if they’re behind on their property taxes.

But a case in the U.S. Supreme Court could change that.

“It’s important for the functioning of our community that taxes are paid,” said Ann Post, a partner at the Rembolt Ludtke law firm in Lincoln. “Government needs to provide services, and they need the funds to do it. At the same time, it’s important that we find the right balance that fits the community.”

For people who pay a mortgage, property taxes are usually included in the escrow account, which is part of monthly payments.

But people who own their homes outright must pay taxes when they’re due.

If they don’t, Post said it could mean trouble down the road, though it’s a long process.

For example, your 2022 taxes need to be paid in 2023.

If they’re not, it goes to a tax certificate process in March of 2024.

She said a private investor can pay the taxes that are owed on the home.

If the original property owner doesn’t settle the debt, the private investor will own the deed after three years.

“That means we’re now at 2027 before you start to run into any issues with the tax certificate process,” Post explained.

Before your home is taken, state law requires that notices to be delivered to the home.

In rare instances, Post said the private investor might not pay the taxes.

So the government comes in to collect the money.

Every state in the U.S. allows local governments to seize the property and sell it.

But in fewer than 15 states, including Nebraska, the government can keep the entire profit from the sale even after the debt has been paid.

The homeowner receives nothing.

“Do we think that’s fair?” Post asked. “That’s a question that our legislators need to look at.”

This situation happened to a woman in Wisconsin.

She owed around $15,000 in property taxes, interest and penalties.

The county sold her condo for $40,000 and kept the $25,000 left after her taxes were paid off.

The case is now in the Supreme Court, and depending on the ruling, it could change the law in Nebraska.

Post said there are some things you can check to make sure this won’t happen to you.

“Contact your county treasurer,” she said. “There’s two ways you can do that. You can go online and search your property by your parcel ID number or your address, and it’s going to pull up all of your tax information.”

Post said if you see that you’re behind, immediately contact your treasurer to resolve any debts.