Letting unwanted properties go to tax sale and the consequences.

Letting an unwanted property go to tax sale might seem like a simple way to walk away — especially if the property is in poor condition or no longer profitable. But doing so can lead to serious and long-lasting consequences that often outweigh the short-term relief.

What Happens When You Let a Property Go to Tax SaleWhen you stop paying property taxes, the county will begin charging interest, penalties, and administrative fees. In Michigan, you typically have a 2–3 year redemption window to bring the taxes current. After that, the property is legally forfeited to the county and then sold at public auction.
Once this happens, you lose all ownership rights to the property. You won’t receive any compensation from the sale — even if it sells for more than you owe — unless you qualify for limited protections under recent legal changes like the Rafaeli v. Oakland County case.

Consequences of Letting a Property GoFirst and foremost, you’ll lose the property permanently. Even if there’s equity in the home, that value will likely be lost. The process may also damage your credit, especially if the tax delinquency or lien is reported to credit bureaus.
Beyond losing the property, you may still be liable for city fines or code violations that occurred before the sale. If someone gets hurt on the property during the forfeiture period — say, a trespasser or squatter — you could be held legally responsible. In some cases, the county or city may even pursue a judgment against you for cleanup or public safety costs.
Also, if you had any forgiven debt (such as through a mortgage payoff or forgiven lien), the IRS or state tax agency might consider that “phantom income” and require you to pay income tax on it — even though you never received the cash.

Better Alternatives to a Tax SaleIf you don’t want to keep the property, you still have better options than simply walking away.
You could sell the property as-is to an investor. Many investors are willing to buy distressed properties with back taxes, and some may even take them over before foreclosure. You could also donate the property to a land bank or nonprofit for a potential tax deduction, or try negotiating a payment plan with the county to get back on track.
If the property has a mortgage and you can no longer make payments, consider contacting your lender to see if they’ll accept a deed in lieu of foreclosure. And if the property is a vacant lot, a neighbor or local developer might be willing to buy it for side-lot expansion.

Final ThoughtsLetting a property go to tax sale should be considered only after you’ve explored all other avenues. While it may feel like an easy exit strategy, the long-term consequences — including credit damage, legal liability, and financial loss — can be significant.
If you're in this situation, it’s worth consulting with a local investor, real estate agent, or attorney to understand your best path forward before the property reaches tax auction. Walking away might seem easy, but it’s often the most expensive decision in the long run.