Louisiana's new tax lien sales: what happens when property taxes go unpaid

If you don't pay your Louisiana property taxes, the parish no longer sells your house. Since January 1, 2026, it auctions a tax lien: the right to collect what you owe, plus interest. You keep the house and can keep living there, but the debt grows every month, it comes ahead of your mortgage, and after three years the lien holder can go to court to have the house sold.

What changed in 2026

Until the end of 2025, a parish tax sale sold "tax sale title" to the property itself. Louisiana voters changed the state constitution on December 7, 2024. Two laws, Act 774 of 2024 and Act 411 of 2025, built the new system, which took effect on January 1, 2026.

Here's how it works now:

• Unpaid property taxes are a lien on the property.
• The tax collector auctions that lien, not the house. Some parishes run the auction online.
• The winning bidder gets a tax lien certificate, recorded in the parish mortgage records.
• You keep ownership and the right to live there unless a court judgment is carried out.

The first auctions under the new rules ran in the summer of 2026, for unpaid 2025 taxes. St. John the Baptist Parish, for example, auctioned its 2025 tax liens online starting June 25, 2026.

If your property was sold at a tax sale in 2025 or earlier, that sale still runs under the old law, including its deadline to redeem. Don't wait: call the tax collector for the amount, and a lawyer about the deadline.

Step by step: from tax bill to auction

1. The bill. In every parish except Orleans, the sheriff collects property taxes. Taxes are due by December 31 and are late the next day. New Orleans sets its own date early in the year, usually January 31; 2026 city taxes were due by February 28, 2026. Check the date on your bill.
2. Interest. Late taxes cost 1% a month, not compounded, from the day after the due date.
3. A certified letter. By the first Monday of February, or as soon after as possible, the tax collector sends a certified letter. It says that if you don't pay within 20 days, the lien will be advertised for auction. If the letter comes back, the collector has to try other ways to reach you, such as posting a notice at the property.
4. The advertisement. Unpaid accounts are published in the parish's official journal, and may also be listed online.
5. The auction. If taxes, interest and costs are still unpaid 90 days after they became late, the lien goes to auction. By law the auction is advertised by May 1, or as soon after as possible. When the lien is offered at auction, a 5% penalty is added. Until the day before the auction, you can still pay in full.
6. The certificate. Bidders compete on the interest rate they'll accept. Bids start at 1% a month and go down in steps of 0.1%, to no lower than 0.7% a month. The lowest bid wins. Within 30 days, the tax collector records the certificate. If nobody bids, the parish keeps the lien and charges 1% a month.

What it costs once the lien is sold

To clear a sold lien, you pay the "termination price" to the tax collector, not to the investor. The tax collector passes it on. It includes:

• the lien's face value: the taxes, interest and costs as of the auction;
• the 5% penalty;
• interest on the face value at the winning rate, between 0.7% and 1% a month, not compounded;
• the cost of recording the release;
• up to $500 for the notices the lien holder sends you;
• any later parish or city taxes the lien holder paid, with their own 5% penalty and 1% a month interest.

Roughly, for every $1,000 of taxes, the penalty adds $50 once, and interest at the top rate adds $10 a month, or $120 a year. The tax collector doesn't have to take a partial payment.

Your rights while the lien is outstanding

• You keep the house. The auction doesn't end your ownership or your right to live there. Only a court judgment, once carried out, can do that.
• No eviction and no rent. The lien holder can't evict an owner who lives there. It can't charge rent to the owner or anyone living there. A lien holder who breaks these rules owes penalties.
• No building. The lien holder can't build on or improve the property. It can make repairs only when code enforcement or a court orders them, and then it can add the cost to what you owe.
• It still comes first. The tax lien outranks your mortgage and every other lien on the house. That's why your mortgage lender cares: the standard Louisiana mortgage requires you to pay the taxes, treats not paying them as a default, and lets the lender pay them and add the cost to your loan.

When the lien holder can go to court

• Three years, at least. The holder can sue only after three years from the day the certificate was recorded, and only six months or more after notifying you.
• A notice first. Six months to a year before suing, the holder must send you a notice with the current payoff.
• 30 days after the suit is served. Once the holder sues, court costs and attorney fees are added. Fees are capped at $2,500 or 25% of the amount sought, whichever is more, unless the court allows more. You can still pay the tax collector until the 30th day after the last person is served. After that, only the holder or the court can end the lien. You can ask the court to set the payoff at any time before a sale.
• The sale. If the debt still isn't paid, the judgment can be enforced by a sheriff's sale of the house. The judgment is against the house, not you personally. The money pays the costs of the sale and the lien holder first, then other tax liens, then mortgages and other liens. Anything left goes to the owners.
• Seven years. If the holder doesn't sue within seven years after recording, the lien ends. That clock stops while the parish holds the lien, or during a recorded bankruptcy stay.

On the Mississippi coast

Mississippi still sells the land itself. Each county holds a yearly tax sale, by law on the last Monday of August, with an April date allowed. The owner then has two years to redeem by paying the chancery clerk the taxes, costs, 5% damages and interest at 1.5% a month. After two years, the buyer can ask the clerk for a deed. If you own in Bay St. Louis, Waveland or Diamondhead, call the Hancock County chancery clerk early.

Your options

• Pay before the auction. It's the cheapest way out. Pay the tax collector in full by the day before the auction.
• Check the bill. If the value looks wrong, or you're missing an exemption, call your parish assessor. The homestead exemption takes $7,500 off the assessed value of the home you live in. Homes are assessed at 10% of their value, so that covers the first $75,000 of value. If you're 65 or older, or have certain disabilities, ask about the special assessment level, which freezes your assessment; income limits apply. Ask the tax collector what to pay while a correction is pending.
• Call your mortgage servicer. If your loan has an escrow account, the servicer pays the taxes. Federal rules require it to pay on time only while your mortgage payment is no more than 30 days overdue. If you're behind, ask whether this year's taxes will be paid, and read Behind on your mortgage in Louisiana: every option.
• Pay off the lien after the auction. Pay the termination price to the tax collector. Every month you wait costs more.
• Borrow to pay it. Family, a credit union or a short-term loan can clear the lien. Compare the full cost of any loan with what the lien costs you: up to 12% a year, plus the penalty and costs.
• Sell the house. A sale pays the tax lien and the mortgage from the price at closing, if the price covers them. If you have equity and time, a listing agent may get you the highest price. A cash buyer is faster and buys as-is.
• Wait, knowing the clock. The lien holder can't evict you from a home you live in or charge you rent, and can't sue for at least three years. But the debt grows every month, next year's taxes come due on top of it, and your mortgage lender doesn't have to wait three years. Waiting buys time; it doesn't fix the debt.

Free help

• A HUD-approved housing counselor, free or low-cost: use the CFPB's counselor finder or call HUD at (800) 569-4287.
• Southeast Louisiana Legal Services, free legal help if you qualify, including with tax sales: 1-844-244-7871, or slls.org.
• The Louisiana Fair Housing Action Center, (504) 596-2100. Its housing counselor advises New Orleans-area homeowners on the homestead exemption and property taxes, free.
• Your parish tax collector, for the exact amount and the payoff. In New Orleans, that's the Bureau of the Treasury, (504) 658-1712.
• Your parish assessor, for exemptions and your home's value.

How Passkey can help

If a payment, an exemption or help from family can clear the taxes, that's the cheaper route. If not, Passkey can make a short-term loan to catch up on what's owed, such as the taxes or the lien's payoff, with every term in writing. Or we can make a written cash offer for the house as-is, with the taxes and liens paid from the price at closing.

Questions

Can the person who bought my tax lien take my house?

Not right away. They can't evict you from a home you live in, or charge you rent. After at least three years, and six months' notice, they can sue. If the debt still isn't paid, a court can order the house sold.

Who do I pay once the lien is sold?

The tax collector, not the investor. The tax collector sends the money on to the lien holder.

Does the tax lien come before my mortgage?

Yes. By law it ranks ahead of all mortgages and other liens.

How much more will I owe if my lien is sold?

A 5% penalty on the taxes, plus interest of 0.7% to 1% a month on the lien's face value, plus costs and any later taxes the lien holder pays.

My house was sold at a tax sale before 2026. Do the new rules apply?

No. Sales held before January 1, 2026 follow the old law, including its deadline to redeem. Call the tax collector and a lawyer now.