A Michigan family lost a home of $194,400 over a $2,242 tax bill; the county sold it for $76,008

The United States Supreme Court ruled that a Michigan family whose $194,400 home was sold at a public auction over a $2,242 tax debt is entitled to receive only the surplus cash from the sale, not the home's full open-market value. The judgment in Pung v. Isabella County sets a nationwide legal standard for measuring compensation after a fairly conducted tax sale. Writing for the majority, Justice Samuel Alito said that when local authorities seize and sell a home for unpaid property taxes, “just compensation” under the Fifth Amendment is based on the actual public auction price, not a hypothetical market value. The Court issued its decision on June 23, 2026, vacated the Sixth Circuit's judgment, and sent the case back for further proceedings.Dispute over a primary residence tax rateThe legal fight began in Union Township, Isabella County, Michigan. Scott Pung bought the three-bedroom ranch-style home in 1991 for $125,000. The home was the family's primary residence. After Scott Pung died in 2004, his wife, Donnamarie, continued living there. After Donnamarie died in 2008, their son Marc and his family continued to live in the house. The property remained owned by Scott Pung's esta...