Who gets the extra money when a house sells at a tax sale for more than the taxes?

The short answer

The owner on record, or the owner's heirs. When a house sells for more than the taxes, the extra (the surplus) is held by the county. If nobody redeems the house and the buyer gets a tax deed, the owner or heirs can claim it from the county. If the house is redeemed, the surplus goes back to the bidder instead.

When the surplus becomes the family's

Only after the redemption window closes and the tax deed is issued. Until then the house can still be redeemed, and if it is, the bidder gets their money back. So the surplus is money for a family that lets the house go, and it comes a year or more after the sale.

How it's claimed

The county auditor handles surplus claims. When the owner has died, the heirs have to show they are the heirs, usually with the same estate paperwork or affidavit they would need to sell the house. There is a deadline to claim it, so ask the auditor how and by when as soon as you know about the sale.

If several heirs share the house, they share the surplus the same way.

Be careful with surplus recovery companies

Some companies call families offering to recover the surplus for a share of it, sometimes a large one. You can claim it yourself from the county, and a local attorney can help for a fixed fee. Read anything before you sign it.

Surplus or selling first

Letting the house go and claiming the surplus is a real option. It is usually less money than selling the house before the deadline, because the bidder keeps the house, and the surplus is only what the bidder paid above the taxes. But it takes no work from the family beyond the claim. Our tax page lays the options side by side.