<div dir="ltr"><div>I have a client who purchased a property at a foreclosure sale ~8 months ago. The previous owner had his property taxes deferred under the senior citizen/retired person deferral for most of the 1990s. This week, client got a letter from DOR demanding payment of the previous owner's delinquent deferred taxes now that the property has been sold.<br><br></div><div>In my initial conversation with the DOR auditor, I was told that ordinarily the deferred taxes are collected during the sale and forwarded to Deferred Tax department, but since somehow that didn't happen with this foreclosure, the purchaser is responsible.<br></div><div><br></div><div>RCW 84.38 says that deferred taxes become due when the property is sold, the person dies, the property is taken through eminent domain, or the person stops using the property as their permanent residence.<br><br></div><div>Has anybody encountered this before? How are deferred taxes usually collected? Are they supposed to be disbursed to the DOR from the sale proceeds by trustee? Can one successfully argue that since a foreclosure is not a voluntary transfer/sale, the purchaser should not be liable for the previous owner's delinquent deferred taxes?<br><br></div><div>A foreclosure is exempt from real estate excise tax, so I'm curious if a similar argument can be made for unpaid deferred property taxes.<br><br></div><div>Thanks for your insight!<br><br></div><div><div dir="ltr"><div><span style="font-family:tahoma,sans-serif"><font><span style="color:rgb(102,102,102)"><span style="line-height:150%">Best Regards,</span></span></font><font color="#888888"><span style="color:rgb(102,102,102)"><span style="font-variant:small-caps;font-size:13.5pt"><b><font><br>
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