The County Sold My House for Back Taxes. Do I Get the Extra Money?

Yes, you are usually entitled to the money left over after your unpaid taxes are covered, but it is a much smaller amount than most people expect. On June 23, 2026, the Supreme Court decided Pung v. Isabella County and held that the Constitution entitles you to the auction sale price minus your tax debt. Fair market value is not the measure. In many counties those two numbers are nowhere near each other.

What Is a Tax Foreclosure Surplus?

A surplus is whatever is left over when a county sells your property at a tax auction for more than you owed in delinquent taxes, interest, and fees. The county takes its debt out of the sale proceeds, and the remainder belongs to you as the former owner.

Until recently, several states let counties keep the entire sale price no matter how small the tax bill was. The Supreme Court ended that practice in Tyler v. Hennepin County, 598 U.S. 631 (2023), holding that keeping the excess above the tax debt is a taking of private property. What Tyler never said was surplus of what. Surplus over the auction price, or surplus over what the home was actually worth? That question sat open. Pung answered it, and the answer favors counties.

Did the Supreme Court Rule For or Against Homeowners?

Against them, on the question that mattered most to the family who brought the case. Press coverage of Pung was genuinely contradictory, and it is easy to see why. Some outlets led with the fact that the ruling was unanimous and that the Court reaffirmed a constitutional right to surplus proceeds. Others led with the fact that the family walked away with a small fraction of their home's value. Both of those descriptions contain something true.

Here is the accurate version. Justice Alito wrote for the Court. All nine justices agreed on the judgment. Justice Thomas joined the opinion except for Part II-B and wrote separately. Justice Sotomayor wrote a concurrence joined by Justices Gorsuch and Jackson. The Court vacated the Sixth Circuit's judgment and sent the case back instead of affirming outright. On the core legal question, though, whether the Constitution measures your surplus by market value or by hammer price, the county won. The Takings Clause entitles the former owner to the sale price minus the debt, the Court held, and the Excessive Fines Clause does not require the government to return any more than that.

The Court did attach a qualifier. That is the rule, it said, "at least when the sale is fairly conducted in light of our country's history of tax sales." It then expressly declined to say what a fairly conducted sale requires. More on that below, because it is the one door the decision left open.

Why Did My House Sell for So Much Less Than It Is Worth?

Because a tax auction is not the open market, and the gap can be enormous. The Pung record shows this plainly. The family owed $2,241.93 in property tax. Isabella County's own assessment valued the home at $194,400. At auction, the property brought $76,008. After the tax debt came out, the family received $73,766.07. A footnote in the opinion records that the buyer who bought at that auction resold the property on the open market for $195,000 in under eighteen months.

So a house the county itself valued at $194,400, and that the open market valued at $195,000 within a year and a half, cleared $76,008 at the county's own sale. Justice Thomas put the family's loss at roughly $118,000.

Amicus briefs cited by Justice Thomas describe similar gaps elsewhere in the country. A West Virginia property worth $65,000 sold for $2,700 over an $80 lien. A Baltimore property worth $140,000 sold for $5,000. A Nebraska property worth $59,000 sold for $588. In Washington, D.C., tax-lien properties sold for an average of $17,400 against an average assessed value of $578,100. Those figures come from a brief filed by Maryland Legal Aid and others, and Justice Thomas collected them in a footnote to his separate opinion.

Can I Get the Full Market Value of My Home?

No. That is the specific argument Pung rejected. The federal Constitution does not require your county to write you a check for the difference between your tax bill and what an appraiser would say the house was worth.

Justice Alito's reasoning ran along several lines. Centuries of American and English statutes and cases, he wrote, refunded only the "overplus" produced by the sale itself, and nothing in that history points toward a market-value entitlement. An owner facing a tax sale who is properly notified in time can usually head it off by refinancing or by selling the property on the open market first, which is where full value can actually be captured. And a market-value rule would frequently leave the government paying out more than the sale brought in, so that collecting a delinquent tax became a money-losing exercise and tax sales became impractical to run at all.

Whatever you make of that reasoning, it is now the federal floor. If you want more than sale price minus debt, the source of that right has to be your state's law. The U.S. Constitution does not supply it.

How Long Do I Have to Claim the Money?

Less time than you probably think, and once the window closes it is very hard to get the money back. This is the part of Pung that will cost ordinary people the most, and it got almost no press attention.

The Court reaffirmed Nelson v. City of New York, 352 U.S. 103, 109-110 (1956), for the proposition that the right to surplus proceeds is not absolute and may be subject to reasonable time limits set by state statute. In practical terms, your state may require you to file a claim within a set window after the sale, and if you do not file in time, the county generally keeps the money. The Supreme Court has said only that reasonable state time limits are permitted, so an unusually short window, or one applied to an owner who never learned of it, is not automatically the end of the matter. Do not treat a missed deadline as a reason to skip asking.

Two consequences follow. First, there is no federal claims process and no national deadline. The length of the window, the form, the office you file with, and the proof you must attach are all set by state law, and they differ from state to state. Second, Pung does not address whether a county must notify you that a surplus exists, so do not count on anyone coming to find you. If you moved after the foreclosure, if mail kept going to the foreclosed address, or if the person named on the deed has died and the family does not know a surplus exists, assume the clock is running.

Find out your own state's deadline before you do anything else. Do not rely on a figure you read in an article about some other state, including this one, which deliberately prints no state's numbers. Call the county treasurer or whichever county office handled the foreclosure sale and ask what the claim deadline is and what has to be filed.

What If the Auction Was Not Run Fairly?

That question is wide open, and Pung was careful to leave it open. The holding was limited to sales that are "fairly conducted in light of our country's history of tax sales," and the majority declined to define the phrase. Justice Sotomayor's concurrence, joined by Justices Gorsuch and Jackson, exists largely to make sure nobody reads the opinion as blessing any particular auction practice. The Court endorsed no view about what fairness requires.

Justice Thomas went further and laid out what he believes history demanded of a tax sale. He pointed to a rule tracing back to chapter 9 of Magna Carta that personal property be sold before land is touched. He cited Stead's Executors v. Course, 4 Cranch 403, for the principle that only so much of a parcel as is needed to satisfy the debt may be sold. He described a historical requirement of rigorous notice to the owner, and procedures designed so that the auction price would approach the property's actual value. In his view Isabella County appears to have honored none of these, and he called what happened to the Pung family "wrong, and, on my initial view, likely unconstitutional."

Read that carefully before you get your hopes up. It is a preliminary view held by two justices, written separately, and it is not the law. Justice Gorsuch joined Justice Thomas's opinion except as to one footnote, and Justice Gorsuch also joined the majority in full. What it does is sketch the argument homeowners will be making for the next several years, and the majority did not shut that argument down. Even in Pung, though, the Court sent the fairness arguments back only for the Sixth Circuit to decide whether they were preserved there at all.

One more detail from Justice Thomas's opinion is worth knowing, because it explains why this case drew separate writing at all. Michigan's tax tribunal and the Michigan Court of Appeals had both ruled that the Pungs did not owe the additional second-home tax the assessor tried to impose. The assessor re-imposed it anyway, and of the judge who had ruled against her she said, "I don't care what he says." The majority opinion describes the dispute differently, saying the family still owed $2,241.93 in real-property taxes and refused to pay. Michael Pung brought the case as personal representative of the estate of Timothy Scott Pung.

What If I Never Got Notice of the Sale?

Notice is a separate legal question from the surplus question, and Pung did not resolve it. The Court's holding concerns how much money you are owed after a sale happens, not whether the sale itself was valid in the first place.

Defective notice is still worth raising with the county and worth documenting carefully. Justice Thomas listed rigorous notice among the historical protections he believes a legitimate tax sale required, and a notice failure may bear on whether a sale was "fairly conducted" under the majority's undefined qualifier. Your state's own statutes also impose notice requirements, and those vary widely. What you should not assume is that never receiving a notice automatically unwinds the sale or pauses your deadline to claim the surplus. Treat the deadline as running, file within it, and raise the notice problem as a separate matter.

What Should I Do Right Now?

Deal with the deadline first and the fairness arguments second. The surplus money can disappear on a calendar date. A fairness challenge does not evaporate the same way.

1. Call the county treasurer or the office that conducted the foreclosure sale. Ask whether a surplus exists on your parcel, how long you have to claim it, what form or petition is required, and where it gets filed.
2. Get the sale paperwork in writing. You want the auction price, an itemized statement of the tax debt, and every fee, penalty, and interest charge the county deducted before calculating the surplus.
3. File the claim even if you think the amount is too low. Filing preserves your position. Waiting while you decide whether to fight does not.
4. Document what the property was actually worth. Useful evidence includes the county's own assessment, any recent appraisal, comparable sales in the neighborhood, and the price the auction buyer got when reselling. In Pung, that resale price appears in the opinion itself. This will not increase what the Constitution owes you, which is fixed at sale price minus debt. It matters only if your state's law gives you more, or if you are arguing the auction was not fairly conducted.
5. If the person named on the deed has died, work out who has legal authority to act. The Pung case was brought by the personal representative of an estate, and a probate step may have to come before a surplus claim.
6. Note anything about the sale that looked irregular. Was an entire parcel sold to satisfy a small debt? Was any personal property ever pursued first? Did the notice actually reach the owner?
7. If you cannot afford a lawyer, contact your state's legal aid program or a law school clinic. Surplus proceeds are a recognized legal aid issue, and Maryland Legal Aid was among the organizations that filed briefs in this case.

My Taxes Are Behind but the House Has Not Sold Yet. Does This Change Anything?

Yes, and it raises the stakes on doing something before the auction date. The Supreme Court's reasoning openly assumes you have a way out, either refinancing or selling the property yourself on the open market where it can fetch something close to real value. Once the county's auction happens, your constitutional compensation is measured by whatever that auction produced, and the Pung record shows how far below value that figure can land.

Contact the treasurer's office about a payment plan, hardship deferral, or poverty exemption before a foreclosure judgment is entered. Programs like these exist in many places, their terms are set by state and local law, and the window to use them closes well ahead of the auction. Selling the house yourself, even in a hurry and at a discount, will in most cases leave you with far more than a tax auction will.

This article is general legal information about a federal court decision. It is not legal advice about your property or your deadline. Procedures for claiming surplus proceeds are set by state law and differ from state to state. The full slip opinion in Pung v. Isabella County, No. 25-95, is posted at supremecourt.gov.