Thomas described the practice that at least half the counties in Ohio use to the House Local Government Committee.
“If you have a $5,000 delinquency, for example, the county may try to work through the normal collection procedures with you, or they may sell that $5,000 debt to a third-party corporation,” he said. “The corporation then owns your debt and the ability to foreclose. They often add high interest rates and fees, balloon payments and bad payment structures and are incentivized to foreclose with the ability to gain the property for pennies on the dollar.”
The bill would “sunset” tax lien sales at the end of this year. The measure has received two hearings and was amended last week to apply only to agricultural and owner-occupied properties. Treasurers would still be allowed to use this tool on commercial and other property types.
Local governments and schools collect roughly $24 billion in property taxes annually, money used to provide essential services. The fiscal note for H.B. 493 indicates property tax delinquencies and penalties totaled about $2.8 billion statewide in 2024.
County treasurers have a number of ways to deal with past due tax bills and most if not all allow payment plans. As a last resort, they can take a property through foreclosure. Troy said especially now, with tax bills through the roof for many homeowners, this bill is necessary.
“Recent increases in property valuations have only made it more difficult for many of our citizens to pay their property taxes in a timely manner. Allowing these delinquent tax certificates to be sold to third-party collection agencies only increases the pain felt by our homeowners, leaving them with mounting debt and the threat of foreclosure hanging over their heads,” Troy said. “We need our local officials to work with them to mediate and resolve their delinquency, not hire predatory third parties to harass them.”
The first half property tax bills were due statewide recently and county treasurers in southwest Ohio differ on this particular collection tool. Montgomery County Treasurer John McManus told this media outlet tax lien sales — and the threat thereof — are an invaluable tool that should not be eliminated, “especially in large urban counties, county treasurers simply don’t have anywhere near the capacity to address delinquency with foreclosures only.”
In 2025 Montgomery County collected $38.5 million in tax delinquencies and the largest portion, $14.28 million, was collected after taxpayers were notified of the impending sale.
“The amount of delinquent taxes sold as liens is significantly less than the amount of delinquent taxes paid in the run up to the lien sale,” McManus said. “It is reasonable to assume, of course, that without the tax lien sale, the delinquent taxes paid in the run up to the sale would not be paid into the county treasury for the eventual benefit of the schools, cities, townships, human services, police and fire, and more.”
McManus said they give delinquent taxpayers ample opportunities to avoid the lien sale, they send at least five notices and they don’t even have to pay the entire debt at once. He also refuted the “pennies on the dollar” claim saying while some treasurers might sell discounted tax liens he insists on the full amount.
Clark County Treasurer Pam Littlejohn began using lien sales in 2024 because she said she “inherited quite a delinquency package” when she was elected in 2020 and the foreclosure process through the county prosecutor’s office “is very time consuming and we were not getting the turnaround we would like to put properties back into a revenue stream.”
She said they tailored their program to avoid properties owned by seniors, veterans, disabled individuals, those receiving the Homestead exemption and properties valued at $50,000 or less. She also offers payment plans. “Show me you’re making an attempt to pay, I’ll take partial payments all day long,” she said.
She said most of the tax lien sales are for commercial properties and out-of-town landlords.
“We brought in, in the fourth quarter of last year, $803,000 and none of them were people that you would feel should have been in a delinquency position,” she said. “That was delinquent dollars that our schools, our libraries, our parks, EMS, our police all those are lacking those dollars due to the negligence of people who really have the ability to pay.”
Warren County Treasurer Randy Kuvin said it could backfire.
“I do not view H.B. 493 as meaningful or helpful property tax reform,” Kuvin said. “In fact, elimination of tax lien sales would likely directly result in increased delinquencies, more foreclosures, and reduced funding to local governments and schools, and indirectly lead to increased taxes on non-delinquent taxpayers to ‘make up for’ the delinquencies.”
The treasurers in Butler and Greene counties — where delinquency rates historically are below 5% — don’t utilize the tool.
“We believe that our foreclosure rate and delinquency rate are both low,” Butler County Treasurer Mike McNamara said. “We work with homeowners to help them pay their delinquent taxes while maintaining timely current payments. Payment plans are the best tool we have for that.”
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