Detailed Answer
When property taxes go unpaid, Alaska law allows a local government (borough or municipality) to place a lien on the property, advertise a tax sale, and ultimately foreclose the owner’s rights. However, several statutory tools and procedural safeguards can protect owners facing financial hardship.
1. Understanding the Tax Lien Process
Under Alaska Statute AS 29.45.420, a lien attaches to real property on January 1 of each year for which taxes are due. The lien takes priority over almost all other interests. Local governments must then follow strict notice and publication requirements before a tax sale.
2. Requesting a Payment Plan Before Sale
Alaska law allows boroughs to enter into installment agreements. Contact your borough tax office as soon as you receive a notice. Many boroughs will agree to a plan that spreads payments over several months plus interest. This stops the foreclosure process if you stay current on the plan.
3. Deferral and Exemption Programs
Alaska offers hardship deferrals and exemptions for seniors, disabled veterans, and low-income homeowners. For example, under AS 29.45.730, qualifying seniors can defer up to 100% of their borough property taxes until the property transfers. Investigate your borough’s specific forms and deadlines.
4. Redemption Rights After Tax Sale
If your property sells at a tax auction, you generally have one year to redeem it. Under AS 29.45.470, you may reclaim your property by paying the purchaser’s amount plus 8% annual interest. Acting quickly preserves your ownership and avoids judicial foreclosure.
5. Contesting the Sale or Foreclosure
If the borough failed to follow statutory notice requirements under AS 29.45.430 (e.g., publishing notice for three consecutive weeks and mailing to the owner), you can petition the superior court to set aside the sale or foreclosure. Evidence of improper notice can stop the process.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your situation.
Helpful Hints
- Save all notices. Track mailing dates to verify proper service under AS 29.45.430.
- Call your borough tax office immediately upon receiving a tax lien notice.
- Explore deferral/exemption eligibility before the first tax sale publication.
- Consider a short-term loan or equity line to cover arrears and stop foreclosure.
- Watch the notice of sale publication in local newspapers for auction details.
- File a redemption application within one year after the tax sale to reclaim your property.
- Consult a real estate attorney if you suspect procedural errors in the foreclosure.