What is a Tax Sale?

Connecticut General Statutes Secs. §12-155 and §12-157 outline the parameters for collection of taxes and method of selling real estate for taxes.

What is a Tax Sale?

A tax sale is a public auction of property conducted by a municipal entity which applies the proceeds against unpaid taxes or similar assessments owed. The sale can be conducted on any real estate owned by an individual or organization which has failed to pay any kind of tax, sewer charge, or similar debt (whether it was assessed on that real estate or not) owed to a city, town, borough, district, or other municipal authority

Before a Tax Sale

Three delinquent notices are mailed during a 2–12 week period.

Three notices are placed in a local newspaper.

Notice with photos is posted near the Town Clerk’s office.

Tax Sale date is set.

Minimum bid set by the municipality.  Bid based on total delinquency (principal, interest, fees due, cost of auction, jeopardy acceleration of subsequent installments).

At a Tax Sale

Public bids on properties.

Highest bidder (winning bid) will become the purchaser subject to redemption rights.

No guarantees made to winning bidder.  Property is sold “as is.”

After a Tax Sale

Winning bidder pays bid.  Left over money deposited in bank account.  Municipality earns the interest on any excess proceeds.

Notice identifying winning bidder and price is sent to owner and other entities who have a legal interest in the property.

Notice published in a local newspaper.

Tax Collector signs deed transferring property to the winning bidder.  Deed held in the Town Clerk’s office for six months.

Taxpayer still owns and uses the property.  Winning bidder cannot enter, alter or sell the property.

Undoing (Redeeming) a Tax Sale

Tax Sale can be “undone” (redeemed) before six months pass if owner or other entity with interest in the property pays off total delinquency (as of the sale date) including cost of the auction.

Owner or other entity pays 1.5% interest per month to winning bidder on amount bid plus additional debt owed to the municipality not recovered by the auction procedure.

Winning bidder gets original deposit and amount bid back.  Owner keeps property.

Notice mailed to interested parties that Tax Sale has been undone.

After Six Months if not Redeemed

Deed signed by Tax Collector officially recorded by the Town Clerk’s office in the land records.

Winning bidder owns the property “free and clear” of other liens and encumbrances subject to certain exceptions.

Most other interests in the property are wiped out including mortgages, liens, other monetary encumbrances.

Left over money from winning bid sent to local superior court after any other deductions.

Former owner and other entities with recorded interest in the property have 90 days to apply for a share of the money.

Court decides how to distribute.

Winning bidder not allowed to request part of the money.

Winning bidder must evict “holdovers” by legal method.

For additional information click here.

This summary is for general informational use only. It is not financial or legal advice, and it does not interpret or modify applicable law. Since municipalities cannot represent you or your interests, you should consult with your own lawyer about how tax sales work and what your rights and duties are.

Show All Answers

1. Contact us
2. What are the office hours?
3. What is a Tax Sale?
4. How do I check online to see if Real Estate, Motor Vehicle or Personal Property tax has been paid?
5. What is a Mill Rate?
6. How is the Mill Rate determined?
7. When is tax payment due?
8. What if I have not received a tax bill?
9. Can I pay tax online?
10. How does motor vehicle/supplemental motor vehicle tax work?
11. How do I change my motor vehicle billing address?
12. How do I cancel my motor vehicle registration?
13. What if I no longer own a motor vehicle that I received a tax bill for?
14. What if I am delinquent on motor vehicle tax and need a DMV release?
15. What town do I pay motor vehicle tax to if I move within Connecticut?
16. May multiple tax bills be paid with one check?
17. Does the Town of Greenwich offer property tax relief for senior residents?
18. Does the Town of Greenwich offer a tax exemption for veterans?
19. Terms and Definitions