If you are wondering whether you might be owed money from a tax sale, you are not alone. Thousands of former property owners across the country have money sitting in government accounts that belongs to them, and many have no idea it exists. When a property is sold at a tax sale for more than what was owed in back taxes, the extra money, often called surplus funds, belongs to the former owner. The problem is that most people are never told about it.
How Money Becomes Owed After a Tax Sale
Here is how it works. When a property owner falls behind on property taxes, the local government can eventually sell that property to recover the unpaid taxes. This sale happens at a public auction, and buyers often bid more than the amount of the tax debt.
For example, imagine a property with five thousand dollars in unpaid taxes. At auction, the property sells for forty thousand dollars. The county takes the five thousand to cover the tax debt, and the remaining thirty-five thousand becomes surplus funds. That money belongs to the former property owner, not the county and not the buyer.
The same thing can happen with mortgage foreclosure sales. If a foreclosed property sells for more than what was owed on the mortgage and other liens, the excess belongs to the former homeowner. Many people assume they lost everything when they lost the property, but that is not always the case.
Why You Might Not Know You Are Owed Money from a Tax Sale
Counties are generally required to make some effort to notify former property owners about surplus funds, but the notification process is far from perfect. The notice is typically sent to the last known address, which is often the property that was just sold. If you moved after losing the property, the notice may never reach you.
Some counties publish notices in local newspapers, but how many people read the legal notices section of a newspaper? Others post the information on a government website buried in a section that nobody visits unless they know exactly what they are looking for.
The result is that millions of dollars in surplus funds go unclaimed every year. People move on with their lives after a tax sale, assuming everything is lost, never knowing that money is waiting for them.
The notification process and the way surplus funds are handled can vary depending on where the property was located. Learn more about how it works on our Georgia Surplus Funds surplus funds page.
Where to Check If You Are Owed Tax Sale Money
The first place to check is the county where the property was located. Contact the county clerk, the tax collector, or the court that handled the sale. Ask specifically about surplus funds or excess proceeds from the sale of your former property. Be prepared to provide the property address and your name as it appeared on the deed.
Many counties maintain online databases where you can search for unclaimed surplus funds. Check the county's website and look for sections related to tax sales, surplus funds, or unclaimed money. Some states also have centralized unclaimed property databases that include surplus funds from tax sales.
If you are not sure which county to contact, start with the county where you last owned property. If you owned property in multiple locations, check each one. Surplus funds can sit in government accounts for years, so even if the sale happened a long time ago, it is worth checking.
What to Do If You Discover You Are Owed Money
If you find out that surplus funds exist in your name, the next step is to file a claim. The exact process depends on the county, but it generally involves submitting a written claim along with documentation proving your identity and your connection to the former property.
Common documents you may need include a government-issued photo ID, proof of your previous ownership such as a copy of the deed, and possibly other supporting paperwork depending on the county's requirements.
Be prepared for the process to take some time. Government agencies do not move quickly, and there may be a review period after you submit your claim. Some counties require a court order before they will release the funds, which adds additional time and steps.
If the process seems overwhelming, or if you run into complications like competing claims or unclear ownership, you may want to consider working with a professional who specializes in surplus funds recovery. These professionals handle the paperwork and follow-up on your behalf.
Can Heirs Claim Tax Sale Surplus Funds?
Yes. If the former property owner has passed away, their heirs may be entitled to claim the surplus funds. The process is more involved because you will need to prove both the ownership connection and the inheritance relationship. This usually requires death certificates, probate documents, or other legal paperwork establishing the chain of ownership.
If multiple heirs are involved, the funds may need to be divided among them. In some cases, a probate court may need to be involved to determine the proper distribution. These situations can get complicated, but the money is still there and can still be claimed.
Do Not Let Money Owed from a Tax Sale Go Unclaimed
The most important thing to remember is that this money belongs to you. It is not a scam, a gift, or a lottery prize. It is the excess from the sale of your property, and you have every right to claim it. The government is not going to come find you and hand you a check. You need to take action.
Start by doing some research. Check the counties where you owned property. Look at state unclaimed property databases. If you find something, begin the claim process right away. The sooner you act, the smoother the process tends to be. Waiting only makes it harder as records become less accessible and deadlines approach.
Whether the amount is a few hundred dollars or tens of thousands, it is your money. Take the time to check, and if you find something, do not let it sit there any longer than it already has.