Property taxes in Arkansas are a primary source of funding for public services such as schools, road maintenance, and emergency response. When a property owner fails to pay these taxes on time, they become delinquent, triggering a series of consequences. This article explains the process that unfolds after property taxes become delinquent in Arkansas, from initial penalties to the potential sale of the property.
When Property Taxes Become Delinquent in Arkansas
In Arkansas, property taxes are due between the first business day of March and October 15.1Justia. Arkansas Code § 26-35-501 – Time to Pay – Installments If the October 15 deadline falls on a weekend or a holiday, the payment period is extended to the next business day. Any taxes that remain unpaid after this date are considered delinquent. The failure to receive a tax bill does not excuse a property owner from the responsibility of timely payment or the penalties for delinquency.
The County Collector is required by law to add a penalty of 10% of the base tax amount owed. In addition, interest begins to accrue on the unpaid real estate taxes at a rate of 10% per year.
The Path to a Tax Sale for Delinquent Properties
The County Collector is responsible for initiating the process by compiling a list of all properties with unpaid taxes. The Collector must then notify the property owner of the delinquency. This notification includes a mailed notice to the last known address of the owner and a publication of the delinquent property list in a local newspaper.
According to Arkansas Code Ann. § 26-37, if the taxes, penalties, and interest are not paid for one year after the initial delinquency date, the property is forfeited to the state.2Justia. Arkansas Code § 26-37-101 – Transfer of Tax-Delinquent Lands The County Collector then certifies the property to the Arkansas Commissioner of State Lands, which transfers the responsibility for collection and potential sale from the county to the state.
The Commissioner’s office will make additional attempts to notify the property owner and any other parties with a recorded interest in the property.3Justia. Arkansas Code § 26-37-301 – Notice to Owner – Definitions These notices, often sent via certified mail, provide a final warning before the property is scheduled for a public sale.
Understanding the Arkansas Tax Sale Procedure
When delinquent property taxes remain unpaid after certification to the state, the Commissioner of State Lands is authorized to sell the property at a public auction.4Justia. Arkansas Code § 26-37-202 – Procedure to Sell – Definitions These sales are conducted by the Commissioner’s office or a designated auctioneer and are open to the public for bidding.
The bidding process begins with a minimum bid that covers the total amount of the outstanding tax debt and sale costs. The highest bidder is awarded the purchase but does not receive immediate ownership or a clear title. Instead, they are issued a Certificate of Purchase, which signifies their right to receive a deed if the property is not redeemed by the original owner.
The funds generated from the sale are used to satisfy the tax lien. If the winning bid exceeds the amount owed, the excess funds may be claimed by the former owner after the deed is issued to the purchaser.5Justia. Arkansas Code § 26-37-205 – Distribution of Funds – Definition
Redeeming Property After a Tax Delinquency Sale
Arkansas law provides a statutory right of redemption, which allows the original property owner to reclaim their property after it has been sold at a tax auction. This redemption must occur before the Commissioner of State Lands issues a Limited Warranty Deed to the purchaser, which finalizes the transfer of ownership.
To redeem the property, the owner must pay the full amount of the original taxes, along with all accrued penalties, interest, and the costs associated with the sale. The exact redemption amount can be obtained from the Commissioner of State Lands’ office.
An owner has ten business days after the sale to redeem the property from the Commissioner of State Lands. If the property is not redeemed within this window, a Certificate of Purchase is issued to the auction buyer. Redemption is still possible until the deed is issued, but the process can become more complex.
Options to Settle Delinquent Taxes and Avoid a Sale
A property owner has several options to settle their delinquent tax bill before the property is sold at auction. The most direct method is to pay the full amount of taxes, penalties, and interest owed. To determine the exact amount, the owner should contact the County Collector’s office if the property has not yet been certified to the state.
While Arkansas law does not mandate formal, long-term payment plans for delinquent taxes, some counties may offer installment options for current taxes. Property owners should contact the County Collector to inquire about any available options for satisfying a delinquent balance before it is certified to the state.
Once a property is certified to the Commissioner of State Lands, the owner’s primary option to avoid a sale is to redeem the property by paying the full certified amount. This pre-sale redemption is handled through the Commissioner’s office.