Supreme Court rules against Michigan family that lost home in tax sale

Key Points:

• The U.S. Supreme Court ruled that Michigan's Isabella County only owes the Pung family the surplus from the tax sale of their former home—the difference between the tax debt and sale price—not the property's full fair market value, rejecting the family's Fifth Amendment claim.
• Justice Samuel Alito noted that basing compensation on fair market value rather than sale price would impose impractical burdens on jurisdictions collecting unpaid taxes and could make tax sales unfeasible as a debt-collection tool.
• The Court declined to decide on the fairness of Isabella County's procedures in seizing and selling the home, remanding those issues back to the Sixth Circuit for further review.
• Justices Clarence Thomas and Neil Gorsuch expressed initial views that the county's process likely violated constitutional rights, emphasizing the higher right of citizens to their homes despite tax debts.
• The case arose from a dispute over a principal residence exemption and unpaid taxes, with the home sold at auction for $76,000 and later resold for $195,000; the Court reaffirmed that owners are entitled only to surplus proceeds, not full market value, when tax sales are fairly conducted.