Close Menu
Invest Insider News
    Facebook X (Twitter) Instagram
    Tuesday, September 8
    Facebook X (Twitter) Instagram Pinterest Vimeo
    Invest Insider News
    • Home
    • Bitcoin
    • Commodities
    • Finance
    • Investing
    • Property
    • Stock Market
    • Utilities
    Invest Insider News
    Home»Property»California Finally Ends ‘Home Equity Theft’—Closing the Last Loophole in Property Tax Foreclosures
    Property

    California Finally Ends ‘Home Equity Theft’—Closing the Last Loophole in Property Tax Foreclosures

    October 10, 20253 Mins Read


    In 2023, the Supreme Court issued a landmark ruling that reaffirmed a basic constitutional principle: When the government seizes property, it cannot keep more than what it is owed.

    And yet, until this month, it was still happening to California homeowners who fell behind on their property taxes.

    When a homeowner becomes delinquent on their property taxes, local governments place a lien on the property for the amount owed. Before the Supreme Court’s 2023 Tyler v. Hennepin County ruling, that power often went much further. Some governments seized tax-delinquent properties, sold them at auction, and kept all the proceeds—even after the tax debt was paid.

    That meant a homeowner who owed only a few thousand dollars in back taxes could lose a property worth hundreds of thousands and receive nothing in return.

    After the 2023 ruling, though, most states passed reforms that ensured homeowners received any excess proceeds. But in California, a loophole in the state’s tax code allowed counties to bypass public auctions and instead transfer tax-delinquent properties directly to other government agencies or nonprofit organizations.

    While the policy may have been intended to serve the public good, it had devastating consequences. Without an auction, no sale took place and no proceeds were generated, depriving homeowners of all their remaining equity.

    California’s fix: What AB 418 does

    Earlier this month, Gov. Gavin Newsom signed Assembly Bill 418 into law, closing what the Pacific Legal Foundation called “the last major loophole” in the Golden State’s property tax foreclosure system.

    The new law bans local governments from keeping or transferring homes without providing compensation to the former owner, and ensures that any foreclosure generates a sale, and any surplus funds from a sale are returned to the homeowner.

    While Newsom didn’t issue a public signing statement, property rights advocates hailed the reform as a historic victory.

    “For too long, California allowed local governments to strip homeowners of their life savings,” said Jim Manley, state policy director at the Pacific Legal Foundation. “With the signing of AB 418, that injustice ends.”

    As many as 3.3% of California mortgage holders were delinquent on their property taxes in 2024, according to a recent Cotality report. That may sound like a small share, but in a state with nearly 40 million residents and a 55% homeownership rate, it represents hundreds of thousands of homeowners at risk of falling into tax foreclosure.

    The reform caps off a decade-long campaign by PLF to end home equity theft nationwide. For California homeowners, it’s long-overdue protection from the government collecting more than what it’s owed. And for the remaining states practicing shadow equity theft, it’s a promising example of how to right these wrongs.

    This is a “victory not just for California property owners, but for property rights everywhere,” Manley added. “With the signing of AB 418, that injustice ends.”

    What it means for homeowners

    For California homeowners, AB 418 doesn’t erase the risk of losing property over unpaid taxes—but it ensures they won’t lose everything. Counties can still foreclose if taxes go unpaid, but properties can no longer be transferred without a sale, and any equity remaining after the debt is settled must be returned to the original owner.

    For California homeowners, AB 418 restores a basic promise first laid out in the Constitution’s Takings Clause: The government can collect what it’s owed.

    Or, in the words of Chief Justice John Roberts: “A taxpayer must render unto Caesar what is Caesar’s, but no more.”



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous ArticleDow sinks 800 points, S&P 500 and Nasdaq see worst day since April as Trump’s renewed tariff threats spook Wall Street
    Next Article Market Close Stock Round-Up October 10, 2025: All 3 Major Indexes Take Major Dive Amid Tariff Fears

    Related Posts

    Property

    China’s new home-presale rules could cut land sales by 30%: Goldman

    September 6, 2026
    Property

    Opinion | Why China won’t ban housing presales outright

    September 5, 2026
    Property

    Goldman Sachs warns China’s housing overhaul will slash land sale revenues by 30%

    September 5, 2026
    Leave A Reply Cancel Reply

    Top Posts

    How is the UK Commercial Property Market Performing?

    December 31, 2000

    How much are they in different states across the US?

    December 31, 2000

    A Guide To Becoming A Property Developer

    December 31, 2000
    Stay In Touch
    • Facebook
    • YouTube
    • TikTok
    • WhatsApp
    • Twitter
    • Instagram
    Latest Reviews
    Stock Market

    Wall Street today: Tech-heavy Nasdaq drags US stocks ahead of Nvidia earnings

    August 28, 2024
    Bitcoin

    Can BTC rebound from its recent correction as institutional demand strengthens?

    September 1, 2025
    Finance

    Why Janet Yellen wants more Americans to have a bank account

    October 29, 2024
    What's Hot

    Coinbase CPO Rejects Claims Of Opposing Bitcoin Tax Relief As Jack Dorsey Demands Clarity From Brian Armstrong

    March 11, 2026

    Captive Insurance Times feature article

    January 2, 2025

    Bitcoin tumbles as geopolitical tensions weigh on risk appetite

    July 8, 2026
    Most Popular

    Closing Bell: Sensex up 398 pts, Nifty near 25,200; IT, metal, pharma gain

    October 8, 2025

    Has China’s real estate market turned a corner? – Bamboo Works

    July 24, 2024

    From 1980 to Today: What Past Recessions Tell Us About Future Downturns in the Stock Market

    March 26, 2026
    Editor's Picks

    Is Cryptocurrency Liquidity Shifting From Bitcoin to Altcoins?

    August 28, 2025

    Asian shares are mostly lower after US stocks retreat

    October 7, 2025

    Bitcoin sort de la portée, les analystes ciblent 315 000 $ de pic

    May 23, 2025
    Facebook X (Twitter) Instagram Pinterest Vimeo
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions
    © 2026 Invest Insider News

    Type above and press Enter to search. Press Esc to cancel.