Tax Deed Sale vs. Tax Lien Sale in Michigan: What Actually Happens?
Michigan doesn't sell tax liens. In tax-lien states, an investor buys the tax debt and earns interest while you keep the house. In Michigan, the county forecloses on the house itself: unpaid taxes go delinquent, then forfeit, then the house is foreclosed if they're not paid by March 31, the county takes title, and it's sold at a public auction that summer or fall.
Reviewed by Dennis Fassett, founder of Dennis Buys Houses · Updated November 2026
This page is part of the Selling a House With Delinquent Property Taxes in Michigan guide, which has the 2027 deadline table. This one explains how Michigan differs from tax-lien states.
How Tax-Lien States Work
In some states, the government sells the unpaid tax bill to an investor as a lien certificate. The owner keeps the house and can pay off the investor with interest during a redemption period. If they don't, the investor can eventually take the house. Most national articles about "tax liens" describe that system. It isn't Michigan's.
How Michigan Works
- 1Delinquent
Unpaid taxes go to the county treasurer on March 1 after the tax year.
- 2Forfeited
A year later, the county can start foreclosure. You still own the house.
- 3Foreclosed
If everything isn't paid by March 31 the following year, the county takes title.
- 4Auctioned
The county sells the house at public auction, usually starting in July. No one buys your tax debt along the way.
Want a Number to Compare Against?
Tell me about the house and which tax years are behind. I'll give you a straight as-is number, and tell you if keeping it or listing it makes more sense.
What Happens at the Auction
Counties hold at least two auctions, usually July and the fall. The first sets a minimum bid covering the back taxes, interest, fees and foreclosure costs; later rounds often start lower. Houses that don't sell go to the city or township, or to a land bank. By auction day, the former owner can't redeem the house anymore.
What Happens to Your Equity
After the Michigan Supreme Court's 2020 Rafaeli decision, former owners can claim the money left over when the house sells for more than was owed. You file Form 5743 with the county by July 1 after the foreclosure, then a motion in circuit court the following year. It's a real right, but you get whatever's left after an auction price you didn't set, many months later.
A leftover-proceeds claim is a consolation prize. Selling before March 31 keeps the price, the timing and the equity in your hands.
Ignore Advice Written for Other States
If you read that "an investor bought your lien" or that you have a year to redeem after a tax sale, that's another state's system. In Michigan, the deadline is the March 31 foreclosure date, set by your county treasurer. Mortgage foreclosure runs on yet another clock. (Tax vs. mortgage foreclosure.)
Where I Fit, and Where I Don't
I'm usually a good fit when the deadline is close, when the house needs work or is vacant or inherited, or when you just don't want to deal with it anymore.
I may not be a good fit if you want to keep the house and can catch up on a payment plan, if one's available, or if it's in good shape and there's time to list it. In these cases a payment plan or a traditional listing will likely serve you better.
Either way — I'll tell you directly whether or not I'm a good fit.
Frequently Asked Questions
No. The county forecloses and auctions the property itself.
No. Your right to redeem ends at foreclosure on March 31, before the auction.
At the first auction, enough to cover the back taxes, interest, fees and foreclosure costs. Later rounds often start lower.
Not in Michigan. What an investor can do is buy the house itself before the deadline, with the taxes paid at closing.
The money left after an auction sale pays the taxes and costs. Former owners can claim it by filing Form 5743 by July 1 after the foreclosure.
Michigan Treasury – Property Tax Forfeiture and Foreclosure, its Taxpayer Resources page (including leftover-proceeds claims), and the General Property Tax Act (MCL Chapter 211).
Michigan Property Tax Guides
- Selling a House With Delinquent Property Taxes in Michigan (Full Guide)
- What Is the Michigan General Property Tax Act?
- Can You Lose Your Home Over $500 in Unpaid Taxes?
- Right of Redemption After Tax Foreclosure
- How Property Taxes Work for Inherited Homes
- Property Tax Hardship Options by County
Still Before March 31?
Then you still have choices. Tell me about the house and I'll give you a straight as-is number to compare against paying the taxes or listing.