How to Pay Back Delinquent Property Taxes

Property taxes are levied on real estate and, in some jurisdictions, personal property. These taxes fund public services like schools, police and fire departments, road maintenance, and parks. Rules and procedures for property taxes vary significantly by county or municipality.

Determining Your Property Tax Obligation

Understanding your property tax obligation begins with locating your property tax bill, which is typically mailed to property owners or made available online. If a mortgage company handles property tax payments through an escrow account, they usually receive the bill directly. This bill contains the property identification number, the assessed value of the property, the applicable tax rate, and the total amount due. It also lists due dates and any penalties or interest that might apply if the bill is not paid on time.

To verify the correct amount owed and the proper recipient of payment, contact your local tax authority. This could be the county tax assessor, tax collector’s office, or a similar municipal department. Their official websites often provide portals for looking up property tax information using an address or property identification number.

Standard Payment Procedures

Once the property tax obligation is clear, several standard methods are available for making timely payments. Many local tax authorities offer online payment portals, allowing taxpayers to pay using electronic checks (eChecks) directly from a bank account or via credit/debit cards. While eCheck payments often have no additional fee, credit and debit card payments typically incur a convenience fee, often a percentage of the payment amount (e.g., 2.22% to 2.39%) or a minimum flat fee.

Payments can also be made by mail, typically using a personal check, cashier’s check, or money order, made payable to the specific tax collector’s office. It is advisable to include the property tax account number on the payment and to mail it several days before the due date to ensure it is postmarked on time.

In-person payments are another common option, usually accepted at the tax collector’s office, where various forms of payment like cash, checks, money orders, and sometimes credit/debit cards are accepted. Additionally, many jurisdictions offer automatic payment options, allowing for scheduled withdrawals from a bank account on due dates, which can help avoid late payments. These automated systems often require prior registration and can be set up for monthly, quarterly, or semi-annual payments.

Addressing Overdue Property Taxes

When property taxes become overdue, penalties and interest are assessed on the unpaid balance. These charges are typically calculated from the original due date and are added to the outstanding amount. For instance, monthly penalties might range from 0.5% to 1.5% of the unpaid tax, and annual interest rates can range from 8% to 18%. The exact calculation and rates are often detailed on the tax bill or the tax authority’s website.

Several options may be available to address delinquent property taxes, although these depend heavily on local regulations and require direct communication with the tax authority. Installment plans, also known as payment agreements, allow taxpayers to pay their overdue taxes in multiple, smaller payments over a specified period. Eligibility for these plans often requires contacting the tax office, demonstrating financial hardship, and agreeing to the terms of the arrangement, which may include making an initial payment (e.g., 20% of the delinquent amount) and paying all current year taxes. Some plans may automatically re-enroll taxpayers if all payments are made on time.

Tax deferral programs allow eligible groups, such as senior citizens, disabled individuals, or low-income homeowners, to postpone property tax payments. Eligibility involves specific income thresholds, age requirements, or disability status. Applying for deferral programs involves submitting an application with supporting documentation, like proof of income or age, to the local tax office. Interest may still accrue on deferred amounts.

What Happens When Property Taxes Go Unpaid

If property taxes remain unpaid, taxing authorities initiate actions to recover the debt. One of the initial steps is the placement of a property tax lien on the property. A tax lien is a legal claim against the property that secures the payment of the overdue taxes, including any accumulated interest and penalties. This lien makes it difficult to sell or refinance the property until the outstanding taxes are paid and the lien is removed.

Taxing authorities can proceed with tax sales to recover unpaid amounts. There are two types: tax lien sales and tax deed sales. In a tax lien sale, the legal claim (lien) is sold to an investor, who collects delinquent taxes plus interest from the owner. If the owner fails to repay, the investor may initiate foreclosure.

A tax deed sale involves selling the property itself at a public auction to recoup unpaid taxes. In some jurisdictions, ownership transfers immediately to the buyer, while others have a redemption period.

A redemption period may be available after a tax sale, allowing the original property owner to reclaim their property. During this time, the owner can pay outstanding taxes, penalties, interest, and costs incurred by the tax sale buyer. Redemption periods range from six months to several years, depending on the jurisdiction and sale type. If the property is not redeemed, the tax sale buyer obtains full ownership, often via a tax deed.