Being Removed from Tax Sale Does Not Remove Your Debt

Baltimore City holds its annual tax sale each May. For the past three years, shortly before the tax sale, the Mayor has removed a large group of owner occupied properties from the tax sale. This was a much needed reprieve for these homeowners, who were often struggling with unemployment or underemployment, massive medical debts and skyrocketing cost of living increases. But what happens to these homeowners once they are removed from tax sale?

It is vitally important that people who have been removed from the tax sale take steps to address their underlying tax debt. Removal from the tax sale only means that you were removed this year. These homeowners will be put right back into next year’s tax sale, often with double the debt, if they don’t take actions to resolve their tax debt. The good news is that there are resources to help with property tax debt, but some of them will only be around for a limited time and it is important to take advantage of them as soon as possible.

The Homeowners Assistance Fund (HAF) is a program through the Maryland State Department of Housing and Community Development that can provide grants or loans for homeowners struggling with housing costs, including property tax bills. This program is funded with Covid-relief funds and a large percentage of the funds have already been given out.  It is very important that homeowners who are interested in receiving this funding reach out now at https://marylandhaf.com/. The best way to complete the application online and if you having trouble completing it online, you should call 833-676-0119 and ask them to refer you to a housing counselor who can help with the application.

The Emergency Mortgage & Housing Assistance Program (EMHAP) is run through the City of Baltimore’s Department of Housing and Community Development. This program also provides grant funding for delinquent property taxes.  Like the HAF program, this funding will also only be available until it runs out. Homeowners should get their applications in as soon as possible. Applications can be submitted online or by mail and those who need assistance can call 410-396-3023. More information can be found here: https://dhcd.baltimorecity.gov/hho/emergency-mortgage-housing-assistance-program.

The Homeowners Property Tax Credit is an important credit to apply for each year that can lower your taxes for the following year. This program is income based and on a sliding scale, so the less income your household makes, the less taxes you will have to pay. For those over the age of 70, you can also claim the credit going back the past 3 years. The key thing to remember about this program is you must apply every year. More information can be found here: https://dat.maryland.gov/realproperty/Pages/Homeowners’-Property-Tax-Credit-Program.aspx

The state of Maryland’s Homeowner Protection Program allows homeowners to enter into a payment plan to pay back delinquent taxes. While keeping up with payments on this program, your property will not be placed into tax sale again. However, keep in mind that you will have to pay the back taxes owed, as well as new taxes that become due in future years. More information about this program can be found below: https://dat.maryland.gov/Documents/2023HPPApplication.pdf

The Homestead Tax Credit won’t resolve your past due taxes but can be a critically important protection going forward. It can cap your taxes if your property assessment goes up significantly from year to year. You only need to apply once and it will stay with your property as long as you live there: https://dat.maryland.gov/realproperty/Pages/Maryland-Homestead-Tax-Credit.aspx

You may also be interested in these water bill related programs that could make your overall household budget more affordable. The Water4All program: https://publicworks.baltimorecity.gov/water4all will make your water bill income based so that you only have to pay a percentage of the bill. The LIHEAP program provides assistance with water bills: https://dhs.maryland.gov/office-of-home-energy-programs/how-do-you-apply/

Finally, Baltimore City residents should be aware that not all homeowners were pulled out of tax sale this year. Those whose properties were valued at more than $250,000 were left on the tax sale list. Those who were in a tangled title situation, such as where the house is still in the name of a deceased family member, were also not removed from tax sale. If you are not sure if your property went to tax sale or you want to confirm that it didn’t, it’s always advisable to call the City to find out: 410-396-3987. If you know you have a tangled title that you need to figure out, MVLS may be able to help.  You can call our intake line at 410-547-6537, Monday through Thursday, 9am-12pm or apply online at www.mvlslaw.org.

“Maryland nonprofits to offer free legal counseling for homeowners with unpaid property taxes” Article Published by The Baltimore Fishbowl

The Baltimore Fishbowl highlights several upcoming legal clinics in partnerships with the Pro Bono Resource Center (PBRC) of Maryland and the Stop Oppressive Seizures Fund (SOS). Homeowners participating in the clinics will meet one-on-one with an attorney and receive free legal advice about the tax sale process and their options going forward.

“Maryland tax sale process must change to stop harming Black residents” Article Published by The Daily Record Editorial Advisory Board

The Daily Record Editorial Advisory Board recently called on the Maryland General Assembly to reform the tax sale system that disproportionately harms Black homeowners. While the U.S. Supreme Court mulls over tax sale constitutionality, Maryland legislators were encouraged to act this year. MVLS staff will testify this week on important tax sale reform bills. Susan Francis, MVLS’ Executive Director, serves on the Editorial Advisory Board.

“Tax sale nightmare: How an unpaid bill can cost Baltimore homeowners thousands, or even their homes” Article Published by The Baltimore Banner

The Baltimore Banner published a new story written by Nick Thieme and Sophie Kasakove outlining Baltimore’s predatory tax sale system. MVLS’ legal service partner, Pro Bono Resource Center (PBRC) is mentioned below.

“One missed payment and you can lose a house that you’ve owned for 35 years and have full equity in. And if you lose it, you don’t get anything,” said Allison Harris from PBRC.

Read the full piece in The Baltimore Banner.

“Mayor Scott lays out Baltimore legislative priorities ahead of General Assembly” Article Published by The Baltimore Banner

The Baltimore Banner published a new story written by Adam Willis and Emily Sullivan outlining Baltimore’s priorities this legislative session. MVLS is mentioned in the quote below.

“Housing activists have long condemned the process as predatory, saying it strips homeowners of wealth. Baltimore does not track the demographics of those affected by tax sale. Pro Bono Resource Center of Maryland and Maryland Volunteer Lawyers Service, organizations that host legal clinics for those facing tax sale, say tax sale predominately hurts vulnerable groups.”

Read the full piece in The Baltimore Banner.