Treasurer slammed after man’s home was seized over $11 tax debt

Uri Rafaeli bought a lovely three-bedroom home to help fund his retirement. Instead, it was sold from under him due to one tiny error.

Uri Rafaeli had his property seized, put up for auction and sold due to a mistake in calculating his property taxes. Picture: Pacific Legal Foundation

A brutal US tax enforcement scheme is under fire after an elderly man lost his home due to an accidental tax debt of just $11.

Uri Rafaeli, who is in his 80s, purchased a three-bedroom rental home in Michigan in 2011 to help fund his retirement.

But while he believed he had paid his property taxes in full, according to Forbes, he received a notice in 2012 that he had underpaid by $US496 ($A695).

He soon repaid that debt – but miscalculated the interest owed, meaning he was still short by $US8.41 ($A11).

That was all it took for Oakland County to take over the home and put it on the market.

It ended up selling for $US24,500 ($A34,349) at auction – a far cry from the $US60,000 ($A84,120) Mr Rafaeli originally paid for the house, before investing thousands more into renovating it to boost rental returns.

Late last year, the former engineer penned an opinion piece in The Detroit News slamming the “draconian” rule that allowed his home to be taken over for such a “piddling sum”.

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The property that was seized from Uri Rafaeli by Oakland County. Picture: Google Maps

“I was shocked and angry, as I knew I had paid my property taxes. Soon I would learn that while I had signed up for a piece of the American dream with my investment, I was entering a bureaucratic nightmare — all thanks to Michigan’s draconian tax forfeiture laws,” he wrote, adding that he was challenging the laws in court.

Now, the bizarre case is making headlines once again after the Michigan Supreme Court criticised the county’s decision to seize Mr Rafaeli’s home.

Earlier in July, it found that while the county did have the right to take over Mr Rafaeli’s house to recover the debt, it was not entitled to hold on to the full value of the property.

Authorities are now concerned the case could lead to a deluge of similar legal cases as others in similar situations to Mr Rafaeli potentially launch legal action in a bid to recoup their losses.

Oakland County commissioners have also contacted Treasurer Andrew Meisner to inform him they were creating a new investigative committee to examine the forfeiture practices.

“It appears your actions as Treasurer to foreclose on an Oakland County retiree’s property for $8.41 has exposed the county to serious risk,” the letter reads, according to The Detroit News.