Home owners in the United States have many responsibilities when owning a home. Besides just making your mortgage payments, you also need to pay property taxes in order to stay in good standing with your community and state. When you do not pay these taxes, it is referred to as tax default, and can have serious consequences for you and your family.
This article will explain what happens when you don’t pay your property taxes in the United States, who it may affect, and how to avoid these consequences.
What are Property Taxes?
Property taxes are a regular fee charged by local governments to help fund services within their community. These fees are based on the value of your home or land that you own. Payment of these taxes is normally due by the end of December each year. Property taxes can be paid in one lump sum or accruing over time if preferred.
Property tax rates and how they are determined differs from state to state, as well as what kind of property may be taxed. If you own a vacation home, for example, you may be subject to a higher property tax rate due to limited access and other factors. In order to avoid these consequences, your primary residence is usually the only place in which you are taxed for having a home.
In certain situations, such as if you lose your job or have suffered from some sort of loss of income, it can be possible to get a property tax deferral until it is easier for you to pay. Again, the rules vary by location and situation, so be sure to contact your local government offices if you’re struggling with this payment each year.
What Happens When You Don’t Pay Property Taxes?
When you don’t pay your property taxes, or at least fail to pay them on time, it is referred to as property tax default. If this occurs, you will be sent notifications by your local government or county letting you know that your taxes are past due and need to be paid immediately. When the date for these fees to be paid comes around, if payment is still not received then you will begin to accrue a late fee.
If you continue to not make your property tax payments, usually after 90 days of being past due, you will receive a notice from your local government letting you know that they are going to begin the foreclosure process on your home. This means that they will start taking action in order to sell off your home and land in order to pay off your debt.
Either way, you will likely soon begin receiving phone calls and letters from companies offering to help you get out of this situation. These companies normally charge a fee for their work and many of them are not reputable or trustworthy. If you end up choosing to work with one of these groups, make sure that they are trustworthy and reputable, don’t charge you too much, explain your options clearly to you, and are able to help solve your problems.
What Can You Do If You Cannot Pay Your Taxes?
While it may seem like there is no way out of this situation, there are some things that you can try. As mentioned before, be sure to contact your local government as soon as possible if you cannot pay. They may be able to work with you on a repayment plan or deferral so that you can get back on track and avoid any consequences such as foreclosure.
It may also be possible to sell off part of your property in order to raise the funds needed for these taxes, but this may not always be allowed. If you are able to sell off some of your land, make sure that it is an area that you are willing to part with before doing so. Talk with your local government about this process as well in order to ensure that you are getting the most for what’s being sold and that there won’t be any consequences from your local government.
In most cases, if you cannot pay your property taxes then you will have to seize the home that was awarded to you in the foreclosure process. In this case, most people would begin searching for another place to live and start from scratch once more. Before deciding which course of action is right for you, always think about what you are currently working with, what options you have for repayment, and how each choice will affect your future.
If you simply cannot pay your property taxes by the time that they are due, then it is important to know what can happen to you if you choose not to pay. If this does occur, there’s a good chance that you will lose your home and will have to start searching for a new one.
If you cannot afford to pay your property taxes, then it is important to take the proper steps in order to try and avoid foreclosure or other negative consequences that could result from not paying these taxes. When you contact your local government, they may be able to help you come up with some repayment plans or other options for solving this problem.