Nieveen v. TAX 106 and Lancaster County, Nebraska, U.S. Supreme Court, No. 22-237  

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Defending a Homeowner’s Property Interest in His Home’s Equity When the Taxman Comes Calling

This case deals with property rights questions that have been simmering in lower courts nationwide in recent years.  When government seizes your home to collect overdue taxes, must it give you any surplus proceeds if it sells the property to pay the taxes, or compensate you for your lost equity if it retains but does not sell the property?  This case is one of three cases now pending in the Supreme Court raising those questions.  They arise in many situations, but disproportionately and most poignantly when the elderly or infirm fall into arrears on their taxes.  In this case, for example, the petitioner is a woman in her 70s who has mental health problems.

NELF filed an amicus brief in support of her petition.  In it we made two points about traditional property rights as they would have been conceived at the time the Constitution was written and as we think they should be protected now.  First, we discussed the history of tax seizures in England and showed that their history, from Magna Carta onward, had been one of curbing government’s power to seize excess property and also of requiring it to return any surplus sales proceeds.  Since these tax seizure cases usually involve real property, we also examined the history of mortgaging real property to secure payment of a debt.  Here, too, as we showed, it became the norm in England for the creditor mortgagee to be strictly limited to taking only so much of the value of the real estate as would satisfy the debt.  Secondly, we traced the development of the concept of having equity in one’s home as a property interest.  Drawing on both modern scholarship and historical learned works, we showed that in England a property owner who had mortgaged land had a right to redeem it by repaying the debt and that courts steadily expanded this right to redeem (called the equity of redemption).  Eventually, they came to treat it as representing a distinct ownership interest in the land (the “equity,” i.e., the value of the land, minus the value of the debt), and not a mere right to re-acquire the property.

We therefore urged the Supreme Court to take the case in order to clarify for lower courts that these two property rights enjoy constitutional protection when the taxman comes for his taxes.



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