Can You Lose Your Michigan Home Over $500 in Unpaid Property Taxes?
Yes. Michigan's tax foreclosure process has no minimum balance. In the Rafaeli case, a property was foreclosed over $8.41 in unpaid taxes that grew to $285.81 with interest and fees, and the county sold it for $24,500. What decides whether you lose the house is the date, not the amount, so a small balance is the cheapest problem you'll ever have to fix.
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 is about why a small balance still matters.
The Rafaeli Case
Uri Rafaeli's company underpaid its property taxes by $8.41. With interest, penalties and fees, that grew to $285.81, and Oakland County foreclosed and sold the property for $24,500, keeping all of it. In 2020 the Michigan Supreme Court ruled that counties have to return the surplus. But the foreclosure itself stood. A few hundred dollars was enough to lose the property.
How a Small Balance Grows
- When it goes delinquentA 4% fee plus 1% interest a month.
- October 1A $15 fee.
- At forfeiture, a year laterA $175 fee, interest rising to 1.5% a month, plus recording and notice costs.
A $500 problem doesn't stay a $500 problem, and the clock doesn't care how big it is.
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 to Do About a Small Balance
Pay it if you can. If you can't, call the county treasurer, get the exact payoff and status, and ask whether a payment plan or hardship option is available. Don't wait for it to feel big enough to be serious.
If You Think the Bill Is Wrong
Dispute it through the right channel: the assessor, the Board of Review, or the Michigan Tax Tribunal for assessment or exemption issues. Refusing to pay while you argue lets the foreclosure clock keep running.
Open every certified letter and posted notice. A small balance plus ignored mail is exactly how a cheap fix turns into a lost house.
When the Taxes Are Part of a Bigger Problem
If the taxes are behind because the house costs more than you can carry, look at the whole picture: mortgage, taxes, insurance, utilities and repairs. If keeping it isn't realistic, selling before the deadline protects your equity. The taxes are paid at closing, and selling as-is to a real estate investor can close quickly with no repairs or showings.
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
Yes. There's no minimum balance. Rafaeli lost a property over $8.41 that grew to $285.81.
Yes. A 4% fee and 1% a month at delinquency, then $175 and 1.5% a month at forfeiture, plus other costs.
Ask the county treasurer whether one is available. Paying it outright is usually the simplest fix.
Dispute it with the assessor, Board of Review or Tax Tribunal, and don't stop paying while you do.
Yes. The taxes are paid at closing out of the sale, as long as it closes before the deadline.
The Rafaeli, LLC v. Oakland County opinion (2020) and Michigan Treasury – Property Tax Forfeiture and Foreclosure, including its foreclosure process timeline.
Michigan Property Tax Guides
- Selling a House With Delinquent Property Taxes in Michigan (Full Guide)
- What Is the Michigan General Property Tax Act?
- Right of Redemption After Tax Foreclosure
- Tax Deed Sale vs. Tax Lien Sale in Michigan
- How Property Taxes Work for Inherited Homes
- Property Tax Hardship Options by County
Behind on More Than the Taxes?
Tell me what's going on with the house. I'll give you a straight as-is number, and tell you if keeping it makes more sense.