Maybe you just paid off your mortgage (congratulations!) or perhaps your aunt died and left you her house. You know you still have utility payments, house insurance and general upkeep. Are you missing something? Yes, you are missing a significant debt that could cause you to lose your home—paying your property taxes.
If you had a mortgage, your mortgage company probably collected enough money from you to pay your monthly mortgage bill but also to pay your property taxes. Once the mortgage is paid off, it is your responsibility to pay those taxes directly. If you are unable to pay taxes, check out our articles on tax suspension and tax credits at tax suspension and tax credits. You may qualify to have your taxes suspended or receive funds to help pay those taxes.
Property taxes are due twice a year—March 1 and September 1. You have a one-month grace period to pay before you start paying a penalty of 1.5% per month. If a tax payment is owing after April 1 or after October 1, the taxes have become delinquent. You can still pay the property taxes but will now have to pay interest and fees as well.
Property can be sold to pay the property taxes when property taxes are delinquent. No later than May 1 each year, notice of the sale of property is given to the owner of the property. The property is offered at public sale on the third Monday in June.
At the tax sale, bidders pay the amount due in taxes, interest and fees. In return they receive a tax sale certificate. The property owner has the right to pay off the holder of the tax sale certificate. The interest on the debt is now 2% per month or 24% per year. This ability to “redeem” the property expires. One year and nine months after that date of sale, usually in March but can be later, the holder of the tax certificate can give notice to the owner that the right of redemption will expire in 90 days. This means that the owner of the property has approximately two years from the date of sale to pay off the taxes, interest and fees and redeem the property. Once that time has expired, the county treasurer will issue a tax deed to the holder of the certificate. The holder now becomes the owner of the property.
Once the tax deed has issued, it becomes increasingly difficult to get the property back. There are a few exceptions such as if the notices were bad or if the owner of the parcel is a person under a legal disability. A person under a legal disability has additional time to redeem the property. The argument that a person is under a legal disability must be raised in an action to remove the person from their home or in a timely filed separate legal action.
If your home has been sold at tax sale, you need to act as soon as you can. You can lose your home and all the money you put into it. Contact an attorney for help.