BOISE, Idaho — The Idaho legislature gave a universal green light in both chambers to move House Bill 444 (H444) to the Governor's desk in an effort to curb "home equity theft."
Home equity theft, as described by the Mountain States Policy Center (MSPC), occurs when a county government repossesses a property with outstanding property tax debts. After selling the property, the government keeps the entire sale value even if—and when—the sale is greater than the tax debt owed.
"They're allowed to profit off foreclosing, and it's excessive," MSPC Senior Policy Analyst Madilynne Clark said. "This made it all the way to the US Supreme Court where they had a unanimous decision to say this is unconstitutional."
The case - Tyler v. Hennepin - is detailed in a MSPC write up from 2023. Hennepin County (Minnesota) collected $40,000 on a repossessed property that owed $15,000. The ruling sets a new standard nationwide to abandon this practice and return the equity back to the former property owner; however, Idaho has a loophole.
A county government can transfer that property to another agency, dodge the sale, and not pay the original homeowner back a single dime.
"And that got my attention," Rep. Jeff Ehlers (R-Meridian). "It really just feels like an overreach on government power."
Ehlers sponsors H444. It would ban such future transfers forcing the county government to sell the property and split the sale fairly with the original property owner. MSPC has no documentation of an Idaho county transferring a property to dodge a sale and return equity to a private citizen, but other states and governments show a different story.
"One of the things that really got me worked up is some of these states and some of these cities do this so much that they actually put a budget item for this type of taking. And they rely on that as revenue to the government," Ehlers said. "I think the winners [in H444 are] the Idaho taxpayer, the Idaho property owners, so that they won't have to face this unfairness in our state."
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