The Supreme Court Should End Home Equity Theft

Thomas A. Berry andIsaiah McKinneyGeraldine Tyler, age 94, owed Hennepin County $2,300 in unpaid property taxes on her Minnesota condominium. She eventually accrued another $12,700 in fees. Her local government then seized her condo and sold it to pay the taxes and fees. The condo sold for $40,000, and Tyler owed the county only $15,000. But the county didn ’t return the excess $25,000 to Tyler. Instead, the county pocketed the excess equity in her home.Tyler sued the county to get the $25,000 back, but she lost in the Court of Appeals for the Eighth Circuit, which held that a Minnesota tax statute “abrogated” Tyler’s property right in her home equity. Effectively, the court held that the county had not taken any of Tyler’s “property” at all, because once the county seized her condo, a statute defined the home equity as no longer her property. Now the Supreme Court has taken Tyler ’s case, and the Cato Institute has filed anamicusbrief supporting her, joined by the American Civil Liberties Union, ACLU of Minnesota, the National Association of Home Builders, and Owners ’ Counsel of America.Unfortunately, Tyler is not alone. This theft ‐​like tax policy of seizing surplus equity occurs in 14 states, and it largely impacts the elderly and the poor—particularly those who own homes but have little discretionary income to pay their taxes. This type of tax law affronts our American sensibilities. It is a basic principle, carried over ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs