Wisconsin property owners work hard to own their own home. Unfortunately, because of difficult times and other unforeseen circumstances, some end up losing their property due to foreclosure. 

Under Wisconsin’s property tax enforcement law, if a property owner is unable to pay their property taxes, counties are authorized to seize the property and sell it to pay off property taxes owed. See Wis. Stat 75.63. However, if the county nets any proceeds from the sale after paying the past property taxes, the county may keep the net proceeds.

Under the Fifth Amendment to the U.S. Constitution, a landowner’s property rights are protected through the “takings clause,” which prohibits private property being taken for public use without just compensation. When it comes to home equity theft, counties are trampling on the constitutional rights of property owners by pocketing the net proceeds after a foreclosure sale that should be returned to the former property owner.

The WRA supports 2022 legislation that would modify current law to require counties to pay any net proceeds in a property tax foreclosure sale to the former owner of the property. This legislative fix built on fairness would eliminate home equity theft by responsibly ensuring property taxes get paid while providing the property owner with any additional proceeds from the sale. 

Watch for more information on this issue from the WRA.