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What Happens If You Don’t Pay Your Property Taxes?

  • May 21, 2021

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With the state of the economy, it’s no surprise that a number of people are having trouble maintaining their home. It has become increasingly difficult to pay the bills which puts people in an uncomfortable situation. There are some tough choices that need to be made regarding what to pay and what to ignore for now.

Usually, people opt to declare bankruptcy and ignore the property tax bill. But, what happens when you do that? Can you lose your home by not paying property taxes?

In this article, we will go over what happens if you have to stop paying your property tax bill and what you can do when you are faced with that possibility.

You could lose your house

There are two possible scenarios at play here when you stop paying your property tax. The first is that the city or town tax authority puts a lien on your home until you are able to pay them the taxes owed or come to an agreement on how to pay them back. Or, your lender will pay the taxes on your behalf and then send you the bill. 

The result of either of these scenarios if you still don’t pay the back taxes is that your house gets foreclosed. There is time before this becomes inevitable because neither the town nor the bank really wants to foreclose, but they also can’t have that money not get paid back.

Challenge the assessment

Before you get to the point that the town puts a lien on your home or the lender decides to foreclose, you should start the process of challenging the taxes that you are paying. Hiring a property tax lawyer like attorney Ryan J. Gibbs is the first step in doing this.

What it entails is challenging how much you actually owe by trying to reduce the assessed value of your home. The value could be wildly off the mark and your taxes are too high to begin with based on the city’s valuation of it. 

There are a lot of factors that affect the value of your home so take a look at what the value should actually be. There could be factors that decrease the value such as new construction in the area, or new zoning changes in the area being in a flood zone, for instance. 

With a lower home value you should be paying less in taxes and that may help your situation. 

Seek an abatement

Challenging the assessment doesn’t actually lower your tax rate, just the amount of taxes owed based on the value of the home. There are circumstances in which you can successfully pay a lower tax rate.

For instance, if you are a veteran having a hard time finding work, then you could qualify for an abatement of your property taxes. Your age, a disability and personal status all come into play and could affect your ability to pay the taxes which could qualify you for an abatement.