Massachusetts Tax Foreclosure Law: What Owners Must Know

If you own real estate in Massachusetts, or if you work in municipal finance, tax collection, or real estate, a major legal shift has changed how cities and towns handle properties taken for unpaid taxes. The old practice of governments keeping all the value above the tax debt is gone. In its place is a clearer process that protects excess equity and puts independent appraisals at the center of the outcome.

The change traces directly to the 2023 U.S. Supreme Court decision in Tyler v. Hennepin County. The Court held that it is unconstitutional for a government to foreclose on a property for unpaid taxes, sell or keep the property, and retain the full surplus beyond the amount owed. In a simple example, if a homeowner owed $5,000 in back taxes on a property worth $300,000, the government could no longer walk away with the remaining $295,000. That surplus—often called excess equity—belongs to the former owner.

Massachusetts responded by updating its tax-title statutes, most notably through the provisions now found in M.G.L. c. 60, § 64A. The amendment closed the “home equity theft” loophole and created a defined process that every municipality (or purchaser of tax receivables) must follow once a final Land Court judgment forecloses the owner’s right of redemption.

Under the new rules, the municipality must choose one of two paths: sell the property or retain it. When the decision is to retain the property, the law requires the municipality to use reasonable best efforts to obtain an appraisal within 120 days of the final judgment, unless the parties agree to a later date. That appraisal carries strict requirements:

• It must reflect the property’s highest and best use as of the date of the foreclosure judgment.
• It must be performed by an independent appraiser licensed in Massachusetts.
• It must follow usual and customary professional appraisal standards.

The resulting value becomes the starting point for calculating excess equity. From that figure the tax-title balance, appraisal costs, and other allowable charges are deducted. An inaccurate number can quickly escalate into Superior Court litigation, creating risk for the municipality, the former owner, and anyone who relied on the valuation.

For property owners the practical meaning is straightforward. There is now a clear statutory right to the equity that remains after the tax debt and related costs are paid. The process for determining that equity is no longer left to the same government entity that took the property. An outside, licensed professional must establish the value, and that number can be tested in court if necessary.

Municipal treasurers and tax collectors across the Commonwealth are still building compliance procedures. Many offices have not yet identified the independent appraisers they will call when the 120-day clock starts. Waiting until a judgment is entered leaves little room for error. Identifying a qualified Massachusetts-licensed appraiser in advance is simply prudent risk management.

The same change also clarifies the role of the appraisal profession. The assignment is not to produce a number that is convenient for any party. It is to analyze the market and report what the market is actually saying about the property’s value as of the critical date. That independence is the point of the statute.

At Worcester County Valuations we provide certified residential appraisal services and brokerage support throughout Worcester County. We work with municipalities preparing for compliance under M.G.L. c. 60, § 64A, with attorneys representing former owners, and with property owners who need a defensible valuation. If your office or your clients face an upcoming foreclosure judgment, an early conversation about independent appraisal support can prevent costly disputes later. Contact us today to learn more or to start the discussion.