Proprty Taxes

Discussion in 'Chit Chat' started by Vinny1, Aug 29, 2010.

  1. I have some questions regarding property taxes. If you don't pay them...

    1) How long do you have before the town repossesses your home?

    2) Once they sell your home, do you get paid the excess of the sales price over the tax amount owed? For example, if they sell your house for $300k, and you owe $3k in taxes, do they give you the $297k difference?

    3) How does having a mortgage affect things?
  2. da-net


    1....usually the govt sells a tax lien to investors and they usually have an interest rate of about 10%...check locally as jurisdiction to jurisdiction is different....some require 3 or more years in arrears

    2....check locally as jurisdiction to jurisdiction is different, but usually there will be lots and lots of other fees like recording, auction, multiple lawyer fees holder may pay the taxes and if you are behind on mortgage they will foreclose rather than letting govt sell tax lien
  3. The town sells the tax lien for what its owed. An investor will usually buy it and then the property owner owes money to the investor. If the property owner doesnt pay, the investor forcloses and property owner gets nothing but an eviction notice.

    If their is a mortgage on the property, they will usually know about the delinquent taxes & pay them before the town sells the lien. If they dont pay it and the investor goes through the whole process of forclosing on the property, the mortgage gets wiped out.
  4. MattF


    Check your state/area. Some do tax liens where they sell off what's owed at the (late) time to an investor for whatever's bid on. The investor can collect from you (amount + interest of whatever it is "set" at) for a period of time. If nothing is paid, they then have the right to foreclose and take the property.

    Other states to tax deeds, where the county/city/municipality doesn't sell the lien, still bills the interest for a period, and ultimately forecloses. Some states can do both.

    Once sold at auction/foreclosed on, all proceeds are kept. Nothing is returned back to the original homeowner.

    Mortgages don't affect, but they can pay the taxes if you are behind through an escrow account and then tack it onto your bill (namely if they are served when late, or know about it). If the tax foreclosure happens first (whether by tax sale or by a tax lien foreclosure), mortgage is wiped out.
  5. This seems a pretty unjust law. If someone owes 3k and a creditor seizes security to repay it, then why does the creditor get anything beyond the amount owed plus collection fees? Once the 3k + fees is paid, the debtor no longer owes anything. The purpose of security for a loan is to make the creditor whole in default, not to give them a lottery win.
  6. That is horrible to lose a $300k home or any home, even worse if it is paid off, and then completely lose it just because you can't pay $3k in taxes. It is a nice profit for the investor though.

    How long do you have to pay the investor the tax amount plus interest before he/she can foreclose on you?

    It sounds like there is alot of money that can potentially be made in buying tax liens in the hopes that the property ends up in foreclosure. Anyone have any experience with it?
  7. its not a giveaway. the Mortgage holder will always be in there bidding to protect their interests.
    if you find a piece of land that the taxes are not being paid on investigate it very closely. you could be buying a toxic waste dump.
  8. I guess you ideally want to find a home that is paid off.
  9. jem


    Typically the auction - foreclosure - game is very competitive.
    If something looks like to good a deal... figure out why no one else is bidding before you make your move.

    I can tell you how many times... I hear about people new to the game getting burnt on the first property they manage to get....
  10. Property tax is a levy issued by a government on a person's real or personal property. The property is assessed to give it a value, and then that value is taxed. The amount of property tax owed is determined by multiplying the fair market value of the property by the current tax rate.
    The amount taxed on a given property may change over time based on a reassessment of the property's value. Typically, property tax is not increased as the value of the home naturally increases; the value of the tax generally remains based on the value of the property at the time it was purchased. Major improvements, however, like building an addition to an existing home, or building a home on a vacant piece of land can trigger reassessment and therefore an increase in the property tax levied. Property tax laws vary by jurisdiction; to be sure of those laws that apply to a particular property, one should consult the appropriate regulatory board or a professional in the field.

    Property tax payments are due annually in most cases, although the annual amount is frequently divided into periodic installments. This may mean quarterly payments, which is common with commercial property. With homes, it is often charged in monthly installments, which may be added to mortgage payments.

    Property tax is known by other terms as well, sometimes referred to as a realty tax because it is most often levied against real estate. It is also called an ad valorem tax, which simply means the tax rate is established by the value. There are also different kinds of property taxes, such as personal property tax. This is usually assessed and charged separately from real property tax and includes personal possessions like automobiles, motorcycles, campers and boats.

    Local governments such as cities and counties derive revenue from property tax. Property tax revenue is generally used for government administration and expenses for first responders such as law enforcement officers, firefighters and paramedics. It is also used to fund local courts. Property tax also helps pay for services including community programs, parks, civic centers, libraries and schools. Quite often, school districts receive a large portion of property taxes.
    #10     Sep 1, 2010