An Iowa homeowner’s fight to keep his house over a $2,441 tax debt could test whether the state’s tax-sale system unlawfully strips property owners of their home equity.
Why it matters: If successful, the lawsuit could have widespread implications for how governments collect tax debt and whether they can be compelled to compensate former owners.
How it works: Iowa counties hold annual tax sales to collect unpaid property taxes, issuing investors interest-bearing certificates until the owners pay.
- If the tax debt remains unpaid for more than one year and nine months, investors may begin the 90-day process to acquire a tax deed.
Stunning stat: Iowa has used tax sales to collect delinquent property taxes for more than 170 years…