Penalties for Late Property Tax
- If you don't pay your property taxes, you could lose your home.house image by Earl Robbins from Fotolia.com
While state and federal governments like to collect their revenues based on your income, local governments tend to get a large portion of their budgets by taxing your property. Because they depend so heavily on it, you will find they are serious about collecting property tax revenues. While the initial penalties for late payments are fees added to your bill, it can escalate to the point where you will lose your property. - The initial penalty you will be assessed when your property taxes are late are fees tacked onto your total bill. This usually takes the form of interest being charged to the unpaid balance of your taxes. The interest compounds daily. If you aren't careful, you can wind up paying more in penalty fees than the original tax payment.
- The next penalty you will tend to be assessed if you are in arrears is to have a tax lien placed against your property. It is a legal claim against your property for the amount that you owe. This will keep you from being able to sell or transfer the property unless the lien is paid and removed. Having a lien against your property will also negatively affect your credit score.
- If your property is not up-to-date with property taxes, you risk having it sold at public auction. If your tax payments are not paid by a date set by your local government, the government can sell the property at auction for taxes. Not only do you lose your property but your back taxes and fees to cover the cost of the auction are deducted from the final price of the auction sale. You will then receive any remaining monies.
