Michigan: U.S. Supreme Court Rules Just Compensation in Property Tax Sale is Auction Price

The United States Supreme Court ruled that just compensation to a former homeowner after a property tax sale is based on the auction price, not the property’s fair market value. The taxpayer’s estate owed $2,242 in back taxes to Isabella County, Mich., which sold the home at auction for $76,008. The county eventually returned the proceeds, minus the tax debt, to the estate. The winning bidder at the tax sale eventually sold the home for $195,000. The estate argued that just compensation was actually more than $190,000, based upon the property’s fair market value. The Court said that “neither the ...