Are you looking to stop property tax foreclosure?
Taxes are an unavoidable and necessary part of everyday life. Some may call it a necessary evil, but regardless of our opinion on them, we understand that anyone that owns a property has to pay property taxes. Not paying them could carry significant penalties, and might even cause you to lose your property.
How are property taxes paid?
- 1 How are property taxes paid?
- 2 What happens if you don’t pay your property taxes?
- 3 How to save your property from tax foreclosure
If a homebuyer has a mortgage, whenever they make a monthly payment, part of it is dedicated towards property taxes. Most mortgages have an impound account, or escrow account, which is set up by the lender when you first obtain your loan. Each month that you make a payment, the money goes into that escrow account, and some of it is then used to make required insurance payments such as homeowner insurance, as well as property tax payments.
Because your tax and insurance payments are collected at the same time as your monthly mortgage payment, it may feel like they are one and the same. However, technically speaking, they are separate payments. In some rare cases, the homeowner must pay their property taxes separately from their mortgage payment.
Once a homeowner has completely paid off his or her mortgage, they are still liable to pay property taxes, but now they will be charged directly by their county tax collector, or whichever government office is in charge of taxes in the area.
What happens if you don’t pay your property taxes?
While the order of events varies from state-to-state and from tax authority to tax authority, as soon as you stop paying your property taxes for a certain amount of time, the county will place a lien on the property.
While the tax authority won’t take immediate action as soon as you stop paying, if you are delinquent for a sufficiently long time, the tax authority will record your name and the total tax amount you owe in the county tax delinquent list (which is part of public records). It may also initiate a tax sale process on your property, and send you a notification about it.
In some jurisdictions, your property may be auctioned off at a tax sale to the highest bidder, while in others a purchaser may buy a certificate of purchase subject to a redemption period. Once the redemption period expires, the purchaser then obtains title to the property and completely claims the property. In some cases, the taxing authorities may simply take over your property and resell it later.
How to save your property from tax foreclosure
If you receive a notification that your property will go into a tax sale, not all hope is lost. You still have a number of options to try to lessen your delinquent tax burden.
1. Contest your tax assessment
While objecting to your property tax assessment won’t wipe out the amount of taxes you owe, it will make it easier to repay them. State and county laws always provide a way for the homeowner to challenge the number of tax assessments on the property and reduce the amount of taxes that you owe.
You have two main grounds in which to contest an assessment. First of all, you can claim that the tax assessment on your property exceeds its real taxable value, because it wasn’t calculated correctly.
Second, you can make the claim that the property has been disproportionately assessed when compared to comparable properties in your area. This makes the claim that its taxable value is actually lower than what’s officially recorded.
If you win the claim, and the assessment is reduced, it will be easier for you to pay the taxes you owe.
2. Take advantage of tax exemptions, and deferrals available for you.
Every state offers tax exemptions and abatements that will lower the total amount of taxes you owe. There are certain tax liabilities that can be reduced due to age, disability, income level, etc. You should consult a trusted attorney to determine which ones apply to your case.
Some states will also lower the total amount of property taxes you owe if you can prove you have suffered a financial hardship, or might even suspend them for a certain period of time. However, it’s important that you act quickly and use these provisions before you become delinquent on your property taxes, because if you default on them, you may not be able to use them.
However, if you already crossed that threshold, you may still be able to negotiate a lower liability with the taxing authority. Again you should consult a trusted tax attorney as to the procedure in your county or state. If the taxing authority agrees to waive penalties and interest, you will find it easier to pay off your delinquency and gain valuable time to do make it happen.
Even if the tax sale has already occurred, it doesn’t mean that you’ve lost the property for good. Some states give you a grace period in which you will be able to redeem the property. To redeem your property you will have to pay the entire sale price plus additional cost in interest.
3. Consider your options if you can’t afford to pay off the tax delinquency
You always have options beyond going into foreclosure or letting your property taxes accumulate until the government comes, repossesses your home and auctions it. Before any of that happens, you can contact a real estate investor, such as Property Nation.
Property Nation buys homes in any condition. They have no commission fees, no agent fees, and because we buy properties cash, the transaction can take place in less than a week. Though we will make a fair offer quickly, you are not obligated to accept it. Why not make it easy on yourself and get a fair cash offer now?
If you’re interested or have any questions, give them a call at (305) 928-2711, or by clicking on this link.