WASHINGTON — On Thursday, the Supreme Court ruled in favor of a 94-year-old woman for her claim that a Minnesota county violated the Constitution by pocketing a $25,000 profit when she sold her home in a tax foreclosure sale.
The court unanimously concluded that Geraldine Tyler can continue her argument that Hennepin County’s decision to keep the surplus violated the expropriation clause of the Constitution’s Fifth Amendment, which requires the government to pay compensation when expropriated. the property.
Chief Justice John Roberts wrote, referring to a passage in the Bible, that taxpayers are only obligated to pay the government what is owed.
«The taxpayer must give to Caesar what is Caesar’s, but no more,» he wrote.
Tyler’s home in Hennepin County, which includes the city of Minneapolis, was seized because he owed $15,000 in taxes and fees. But the county sold the house for $40,000 and kept all the proceeds, say Tyler’s lawyers at the Pacific Legal Foundation.
The conservative group, which often litigates property rights issues, calls the practice «home equity theft.»
«This decision affirms that property rights are fundamental and do not depend solely on state law. The court’s ruling makes it clear that home equity theft is not only unfair, but also unconstitutional,» said Christina Martin , attorney at Pacific Legal Foundation.
The group said in a report last year that a dozen states regularly allow a government to take more than is owed in taxes and that other states have laws that might allow the practice in some circumstances. The remaining states return the surplus when the seized property is sold.
Six states (Arizona, Colorado, Illinois, Montana, Nebraska and New Jersey) allow private investors to hold shares in properties after back taxes are paid, the foundation says. Others allow the government to pocket the remaining capital when the properties are sold.
Tyler bought the one-bedroom condo in a north Minneapolis neighborhood in 1999 and lived there for more than a decade. It was only after she moved into a nursing home that she fell behind on her taxes, starting in 2011.
The county seized the property in 2015, with Tyler owing $2,311 in taxes, as well as nearly $13,000 in related charges, including interest and penalties. A year later, the county sold it for $40,000, pocketing the $25,000 profit.
In Tyler’s case, the St. Louis-based US Court of Appeals for the 8th Circuit rejected his claims in February 2022.
The state said in court documents that, under Minnesota law, it “provides ample opportunity for property owners to protect their interests” before the properties are seized. Owners have three years to pay the taxes and have the opportunity to buy back the seized property.