In the Nov. 5 , 2024 election Louisiana voters approved Constitutional Amendment 4 with a 54.6% approval vote.
This amendment revises Louisiana's tax sale system, in which local governments auction off properties that are delinquent in real estate ad valorem taxes. This amendment shifts these provisions from the Lousiana Constitution to state law.
This amendment becomes effective Jan. 1, 2026.
This amendment totally rework's Louisiana's process for handling property on which tax payments are delinquent--moving from a tax sale process to a tax lien auction process.
A tax lien is the local governmental entity's legal claim to a piece of property for unpaid taxes. If the property owner does not pay the owed debt to satisfy the tax obligation, the governmental entity can sell the tax lien at a public auction.
The amendment allows the lien purchaser to sell the property to pay off the lien. The tax lien operates like a mortgage , with the foreclosure process on the property.
The delinquent taxpayer property owner may cancel the lien by paying the face amount of the lien, with a 5% penalty and 1% monthly interest on the debt. This repayment schedule is the same as currently exists in 2025.
A companion bill to the constitutional amendment became effective upon the adoption of this constitutional amendment. It is also effective Jan. 1. 2026. The details and mechanics for the system handling property tax debts will be removed from the constitution into state law on the effective date.
The new state law requires a three year delay from the filing of a tax lien for the allowed sale of the property. This gives the delinquent taxpayer/property owner more time to pay the debt associated with the property and have the tax lien canceled.
Additionally, an auction to sell the property to satisfy the tax lien can only be conducted through year seven after recordation of the tax lien. Thus the tax lien purchaser must assert his right to have the property auction between the beginning of year four and before the end of year seven from the date of lien recordation.
The companion legislation also outlines the process for contesting and attempting to nullify a tax lien, replacing the constitutional provisions.
Proponents of the amendment listed these benefits:
1. Legislators can easily tweak the statutory lien process;
2. The tax lien system better protects property owners by giving them more options to address the tax debt versus having their property sold at tax sale;
3. The 3 year--7 year window limiting the sale of the property to satisfy the tax lien will automatically clear title issues related to the lien.
4. The tax lien system will not transfer to the tax lien certificate purchaser the obligation to pay real estate ad valorem taxes versus a purchaser at tax sale.
5. The tax lien system should be more attractive to investors, redounding to the benefit of the governmental entity owed the taxes.
The impact of the change from tax sales to tax lien certificates next year will be monumental--to property owners, investors and governmental entities owed real estate taxes. The tax lien system may reduce the number of properties adjudicated to governmental entities for non-payment of real estate ad valorem taxes. It also could reduce the time that the governmental entities can recover delinquent taxes.