what are tax claim overages?

What Are Tax Claim Overages?

A Beginner's Guide 

What Are Tax Claim Overages? When a property owner fails to pay their property taxes, the government may auction off the property to recoup the unpaid taxes. Sometimes, the property sells for more than what was owed. The difference between the amount owed and the sale price is called a tax claim overage, or surplus funds.

How Do Tax Claim Overages Happen?

  1. The local government holds a tax sale due to unpaid property taxes.

  2. The property is sold, often through auction, to the highest bidder.

  3. If the property sells for more than the taxes owed, an "overage" is created.

  4. The original owner (or their heirs) is entitled to claim this extra money.

Why Do Tax Claim Overages Matter?

  • Unclaimed Money: Many homeowners are unaware they can claim these funds. This means thousands of dollars could be sitting unclaimed!

  • Financial Opportunity: If you're a former property owner or involved in real estate investing, understanding how to find and claim overages can be a valuable financial tool.

  • Legal Process: Claiming overages requires following specific legal steps, but it can provide a way to recover some of the equity lost when a property is sold for unpaid taxes.