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Idaho HB 444 would end home equity theft loophole

Idaho’s home equity theft loophole is hopefully approaching an end thanks to House Bill 444. HB 444 is awaiting a hearing in the Local Government Committee and is sponsored by Representative Jeff Ehlers. The bill would amend Idaho Code Section 31-808 to exclude property acquired by tax deed from being gifted to other government entities without compensation to the property owner.

Home equity theft is an egregious practice where the government is allowed to foreclose on a property through tax liens, sell the property, and keep all of the equity after the debts are paid. This practice is completely illegal for private lien holders to pursue. Private lien holders are required to foreclose on a property, pay the debts and return surplus property to the property owner. The shocking behavior of governments taking property without compensation has been used in 10 other states and the District of Columbia and nine other states (including Idaho) have access to a more limited scheme.  


In 2023, Pacific Legal Foundation brought Tyler v. Hennepin County  before the United States Supreme Court. The case involving an elderly woman stemmed from the county taking $25,000 in surplus property after her $15,000 debt was paid. The unanimous ruling issued from the Supreme Court in May was in favor of Tyler with Chief Justice Roberts saying, “The taxpayer must render unto Caesar what is Caesar’s, but no more.”


Mountain States Policy Center published a full analysis on home equity theft last month. That report can be found here.


States still need to end home equity theft outright within their state codes. For Idaho, HB 444 will close the loophole that exists within the Idaho statute. The current language in the law allows governments to foreclose on a property and gift it to another government entity without compensation to the property owner. Selling the property and keeping the financial gain is already illegal.


States across the nation are ending home equity theft in response to the U.S. Supreme Court’s ruling. HB 444 will allow Idaho to come into full compliance with the court’s decision.

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