Supreme Court takes up property ‘theft’ dispute over unpaid taxes

[ad_1]

WASHINGTON — The Supreme Court on Friday agreed to decide a property rights dispute on whether government entities violate the Constitution when they seize homes for failure to pay taxes and then keep all the proceeds or allow private investors to profit.

The justices will decide whether such seizures violate the takings clause of the Constitution’s Fifth Amendment, which requires that the government pay compensation when property is taken. They will also weigh whether government action could be viewed as an excessive fine under the Constitution’s Eighth Amendment.

The justices will weigh a claim brought by Geraldine Tyler, a 93-year-old whose property in Minnesota was seized by Hennepin County because she owed $15,000 in property taxes and related costs. The county sold the home for $40,000 and kept all the proceeds, Tyler’s lawyers say.

The St. Louis-based 8th U.S. Circuit Court of Appeals ruled for the county in a February 2022 ruling, rejecting Tyler’s constitutional claims. The state says that under Minnesota law it “provides ample opportunity for property owners to protect their interests” before a property is seized. The state’s lawyers point out that owners have three years to pay the taxes and have an opportunity to repurchase the seized property.

The case was brought by the Pacific Legal Foundation, a conservative legal group that often brings property rights cases. The Supreme Court, which has a 6-3 conservative majority, is often sympathetic to property rights claims.

The group said in a report issued last year that a dozen states regularly allow what it calls “home equity theft” and other states have laws on the books that could permit it in some circumstances. The remaining states return the surplus proceeds when a seized property is sold.

Six states — Nebraska, Arizona, Colorado, New Jersey, Montana and Illinois — allow private investors to retain equity in properties once the delinquent taxes are paid, Pacific Legal Foundation says. Others allow the government to pocket the remaining equity when the property is sold.


[ad_2]

Source link