This woman owed $15,000 in property taxes on her condo. The government took her home and auctioned it off for $40,000 (a fraction of what it was worth). They kept all of the money, and not just what they were owed. She is suing, claiming that the overage was an unconstitutional taking. The case has made it all the way to SCOTUS. The state claims that the woman didn’t lose out because the mortgage and her HOA fees are cancelled under state law.
I agree that the woman is the victim of an unconstitutional taking without compensation. Whether or not her mortgage and HOA fees are still payable is a different issue, and doesn’t change the fact that the state took what was never theirs to take.
The article mentions a Detroit case where a homeowner lost a home due to owed taxes, the state auctioned it off for $1, and the winning bidder subsequently sold the home for over $300,000. The article then mentions that a SCOTUS ruling may force local governments to sell properties for their fair market value, and not simply auction them off for a fraction of what they are worth. I believe that they SHOULD be forced to sell for fair market value. After all, if I sell a home to myself or to an associate, the IRS will certainly force me to pay taxes on the capital gain at fair market value.
County and local governments complain that such a system would cripple local government property tax collection, but that is horse hockey. We don’t (or at least aren’t supposed to) determine the constitutionality of a law by how much money the government will lose on the deal.
Let’s see how this plays out.