One of the commonly overlooked expenses of owning a home is property tax. Whether you’re unsure of when property taxes are due in your area or forgot to pay them, falling delinquent on property taxes could lead to additional expenses or even losing your home. Despite the seriousness of the consequences, if you act quickly, you’ll have more options to pay back taxes, redeem your property, and save your home.
What Is Tax Delinquency?
Tax delinquency is the failure to pay taxes by their due date. Often, tax delinquency can occur when income or property taxes go unpaid, and they can accrue interest and other penalties. Delinquent property taxes happen when a homeowner fails to pay property taxes to the city or county their property is located in. Unpaid property taxes can have serious consequences, as local governments may take action to collect the taxes owed.
How to Handle a Tax Delinquent Notice
To determine the best way to handle a tax delinquent notice, it’s essential to understand the tax foreclosure timeline.
Year One – Tax Delinquency
The first year your property taxes go unpaid will require your county treasurer to mark the property as “delinquent.” During the first year, the county should send you several notices, and your outstanding taxes may accrue late fees and interest.
If you manage to pay back the owed property taxes within the first year of delinquency, your home will be out of delinquency, and you are no longer at risk of losing the house.
Year Two – Forfeiture
The second year your property taxes go unpaid, the county treasurer will send additional notices, and they may include your property lists of delinquent properties published by local media.
If you do not pay your property tax during the second year, the county treasurer will record a certificate of forfeiture, and the home is considered forfeited. While you may continue to live in the home, if you wish to redeem the property, you must pay all unpaid taxes and accrued fees in full.
Year Three – Foreclosure
The third year property taxes go unpaid is the homeowner’s final opportunity to redeem the property. During that year, a local circuit court will determine whether or not the property will be foreclosed. In Michigan, redemption rights expire on March 31; you must pay all property taxes or vacate the home by this date. After March 31, the local government assumes possession of the property offered at auction on the third Tuesday in July.
Three Most Common Questions About Delinquent Property Taxes
Property owners who are delinquent on property taxes typically have many questions. Here are the answers to a few of the most common questions:
I Forgot to Pay My Property Taxes by the Due Date – Am I In Trouble?
No. If you missed a property tax payment due to an oversight, you only need to pay the outstanding property tax. Remember that overdue property taxes may accrue late fees and interest, so it’s best to pay the amount due as soon as possible.
How Can I Lose My Home If I Own It?
All property owners are required to pay property tax to their local government regardless of whether they have a mortgage or own the property outright. When property owners fail to pay their property taxes by the due date, their home becomes tax delinquent. If the property tax remains unpaid, the house will be in danger of tax-delinquent foreclosure. This process allows the local government to foreclose on the home to recover the outstanding property tax amount.
What Can I Do To Prevent Losing My Home to Tax Delinquency?
The straightforward answer to saving your home is to pay the outstanding property tax, fees, and interest. However, if you face financial hardship, making the payment may be more complex. Luckily, the inability to make a payment immediately does not mean you are out of options.
Here’s what you can do to save your home:
- Request an extension from your county treasurer
- Set up a repayment plan with your county treasurer
- Sell the property before foreclosure
- Submit a poverty exemption application
Resolve Delinquent Property Taxes With Help From Renewed Homes
As time progresses and your property taxes remain unpaid, your options for avoiding foreclosure will change. The experts at Renewed Homes can help you reach a creative and effective solution to stop tax-delinquent foreclosure. Whether you’re in the first or third year of tax delinquency, we can help!
If you’re facing tax-delinquent foreclosure, it may not be too late to save your home! Contact Renewed Homes today to find out how.
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