Late on Your Property Tax Payments? Solutions to Your Tax Delinquency Problems

by | Aug 8, 2017

Whether you’re a new homeowner, or you’ve owned your property for years, you’ve experienced property tax woes and struggles. Property taxes just so happen to be due right around the holidays and are honestly far from convenient…especially if you aren’t prepared to pay for them. Property taxes in California range depending on the price of your home, but they can be hefty. Here’s the breakdown of how property tax is calculated:

1% of the value of your home + voter-approved bonds + fixed charge for special assessments (including Mello-roos) = property taxes.

The median property tax amount in San Diego County is a whopping $3,144 (for a $402,000 valued home) every single year.  Year after year, this can really stack up and become a thorn in your side. If you’ve found yourself falling behind on your property taxes, here’s some information about the delinquency process and your options.

Paying Your Property Taxes in California

Generally speaking, you can expect a penalty if your tax payments are even one day late in California. You’ll receive your tax bill come October, which is payable in two installments. The first installment is due by November, but won’t be considered delinquent until December 10th. Your second payment is technically due on February 1st, and you’ll be considered delinquent after April 10th (69 days after the due date).

What Happens When I’m Late Paying My Property Taxes?

If you’re delinquent on paying your real estate taxes, you’ll incur a late penalty and administrative fees. Your first payment delinquency will result in a 10% late payment fee. So, if you owe the average of $3,144 and fail to may payments – you’ll be charged a $314 late fee on top of your taxes owed. If you’re late again come your second installment, you are charged an additional 10% penalty plus additional fees. As you can see, this can really add up the longer you wait to pay. But, what happens next? Well, ultimately you have five years to pay your delinquent property taxes. If you don’t redeem your home by making these delinquent payments, your home is subject to being sold by the government (tax collector).
When you’ve become delinquent, a lien will likely be placed on your property. This lien will have priority over all other liens that can be placed on your property. In this event, your home can’t be sold until property taxes are fulfilled or paid. If you try to list the home with a lien like this, your buyer won’t have access to a clear title until this payment is made, making selling very difficult.

You Could Lose Your Property to Taxes – Here are Your Options

Property tax foreclosures are a very real danger when you don’t pay your taxes. California counties can enact foreclosures as soon as that five-year mark is breached, and sometimes even sooner when late Mello-roos property taxes are involved. You can be foreclosed on following late Mello-roos property taxes after just 150-180 days. If you can’t make your property tax payments, here are your options

  • Request an abatement: In some cases, you can request an abatement due to financial hardship. An abatement essentially means that your late fees and property taxes are forgiven and you are no longer in danger of foreclosure. But, you must be able to prove and show that you’re only able to keep up with basic living expenses, and nothing more. If you have quite a bit of equity in your home, this type of request will likely be denied.
  • Object: If you object to the assessments made, you’re basically challenging the amount owed. This can only work if the assessment doesn’t match property value and was incorrectly calculated, or you’re able to prove that the assessment doesn’t match comparable property values in your area.
  • Apply for a loan: If you don’t want to risk losing your house, but you can’t make the lump sum payment required, you can apply for an additional loan from a bank or property tax lender. However, you can expect very high-interest rates should you get approved.
  • Sell the house: If you can’t pay the property tax debt, you do have the option of selling. If you have equity in your home, we hope you consider this one of your best options. The last thing you want to do is let your house go to auction and see all of your hard work in making mortgage payments go to waste. While we know that selling your house with a tax lien can be tricky, there are ways to avoid the potential hassle. Many traditional or first-time buyers won’t be able to qualify for buying your home with its clouded title, or they may want to avoid having to assume your property tax debt. One of the simplest options you have is to sell directly to a cash buyer.

If you choose to sell your property, you first have to settle the debt. At this point, your debt would include:
-The total amount unpaid for delinquent taxes over the years
-A 10% penalty fee for every missed payment
-Administrative charges
-Redemption fees
-Monthly penalties accrued from unpaid taxes to date

Sell Direct Will Pay Your Delinquent Taxes & Purchase Your Home

Our team is ready and equipped to pay off all of your delinquent property taxes (without hassle), and then pay out the remainder of the price paid to you in cash. By choosing this route, you don’t have to worry about not being able to sell. We remove all of the guesswork from the equation. You don’t have to pay the late fees that have piled up. Best of all, you can still get cash for the equity you’ve worked hard to build…ultimately avoiding a tax foreclosure.

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