Close Menu
Invest Insider News
    Facebook X (Twitter) Instagram
    Tuesday, September 29
    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 gold strategy signals broader shift in global investments

    September 25, 2026
    Property

    Five rural homes listed near foraging locations across UK

    September 25, 2026
    Property

    UK Property Market: Current Trends and Insights

    September 24, 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
    Finance

    Ma minute finance : comptes joints ou comptes séparés, que choisir ?

    June 15, 2025
    Investing

    S&P 500 Holds Near Records as Strong GDP Cools Hopes for Early Fed Cuts

    December 23, 2025
    Utilities

    United Utilities hit with record £900k fine after 35-hour sewage discharge

    September 8, 2026
    What's Hot

    JP Morgan CEO Has Warning for Markets, Will Bitcoin Concur?

    July 13, 2024

    Oil holds advance as traders focus on supplies and Fed fallout

    August 24, 2025

    Bitcoin and Solana Rally Into August 2025 — But This Hidden Altcoin Could Break Out Next

    August 30, 2025
    Most Popular

    Forget Bitcoin: This Crypto Is the Smarter Buy Right Now

    March 27, 2026

    Africa Finance Corporation Marks First London Stock Exchange Listing with Market Close

    March 10, 2025

    US stocks fall amid rising yields, election jitters; corporate earnings in focus By Investing.com

    October 23, 2024
    Editor's Picks

    Bitcoin (BTC) ETFs Saw Outflows During Crypto Price Crash, but Large Holders Bough the Dip

    August 6, 2024

    China’s new home prices fall at fastest pace in 11 months

    October 21, 2025

    Earnings call transcript: Goodman Group outlines growth and capital strategy in Q3 2026 By Investing.com

    May 25, 2026
    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.