How Long Can You Go Without Paying Property Taxes?

You can typically go without paying property taxes for about 1 to 5 years before losing your home, depending on your state and property type. In Los Angeles County, residential properties have a 5-year redemption period after default, while non-residential commercial properties have 3 years. In Philadelphia, your account becomes delinquent on January 1 of the year after you miss the March 31 deadline, and the city can then pursue a tax sale. In Illinois, after a tax sale, the redemption period ranges from 6 to 36 months. In Minnesota, the redemption period lasts 3 years after the state bids at a tax sale. New York State withholds STAR benefits if taxes are more than one year delinquent. The exact timeline depends on local laws, so you should check with your county tax collector immediately if you are behind.

What Happens When You Miss a Property Tax Payment?

Property taxes are due annually or semi-annually, depending on your jurisdiction. For example, in New York City, property taxes are due quarterly or semi-annually, with grace periods that allow interest-free payment until the 15th of the due month. If you miss the deadline, interest begins to accrue from the original due date, and the interest compounds daily. In Philadelphia, the tax is due on March 31, and if you miss that deadline, your bill becomes past due and accrues monthly interest and penalties. If you still haven't paid or enrolled in a payment plan by December 31, your account becomes delinquent on January 1 of the following year, and the city can place a lien on your property.

In Los Angeles County, if you fail to pay by the final due date (usually June 30), the Treasurer and Tax Collector sends a Notice of Impending Sale followed by a Notice of Auction. The default initiates a waiting period: 5 years for residential properties and 3 years for non-residential commercial properties. During this time, delinquent taxes, interest, and penalties accumulate until the property is redeemed or sold.

State-by-State Timelines for Property Tax Delinquency

The length of time you can go without paying property taxes before serious consequences like tax sale or foreclosure varies significantly by state and even by county. Here are examples from the research:

• California (Los Angeles County): After default, residential properties have a 5-year redemption period, while non-residential commercial properties have 3 years. The county can sell the property at auction if taxes are not redeemed by the end of that period.
• Pennsylvania (Philadelphia): Taxes are due March 31. If unpaid by December 31, the account becomes delinquent on January 1. The city can then file a lien and pursue a tax sale. The timeline from delinquency to sale can vary, but the city may file a petition with the court to sell the property.
• Illinois: After a tax sale, the redemption period ranges from 6 to 36 months, depending on when the tax certificate was issued, the property type, and other factors. During this period, the owner can pay the delinquent taxes, interest, penalties, and costs to redeem the property.
• Minnesota: The redemption period lasts 3 years after the state bids at a tax sale. During this period, the owner or any party with a legal interest can redeem the property.
• New York: Property owners with property tax delinquencies greater than one year are not eligible for the Basic STAR exemption or credit. This means that if you are more than one year behind, you lose a valuable tax benefit, but it does not directly lead to loss of property. However, local governments can pursue tax foreclosure after a certain period, which varies by locality.

These examples show that the timeline can range from about one year (for losing STAR benefits in New York) to five years (for residential properties in Los Angeles County) before the ultimate consequence of losing the property. However, penalties and interest start accruing immediately after the due date, so the financial cost increases the longer you wait.

Consequences of Unpaid Property Taxes

Unpaid property taxes trigger a series of consequences that escalate over time:

• Interest and penalties: Most jurisdictions charge interest on late payments, often compounding daily. For example, New York City charges interest from the original due date, and Philadelphia adds monthly interest and penalties.
• Tax lien: The government places a lien on your property, which is a legal claim for the debt. This lien takes priority over other liens, including mortgages.
• Loss of benefits: In New York, if your property taxes are more than one year delinquent, you lose eligibility for the Basic STAR exemption or credit, which can increase your tax burden.
• Tax sale: Eventually, the government can sell your property at a tax sale to recover the unpaid taxes. In some states, the sale is of the tax lien (certificate), while in others, it is a sale of the property itself. In Illinois, the county sells the unpaid debt to a tax buyer at a public auction, and the buyer receives a tax certificate. After the redemption period, the buyer can obtain a deed to the property.
• Foreclosure by lender: If you have a mortgage, the lender may pay the delinquent taxes to protect their interest and then add that amount to your mortgage debt. If you fail to repay, the lender may foreclose. In Illinois, lenders closely monitor unpaid property taxes and may pursue foreclosure if the homeowner fails to comply.

It's important to note that unpaid property taxes no longer directly affect your credit score because tax liens are no longer reported on credit reports. However, the other consequences can be severe, including the loss of your home.

How to Avoid Losing Your Property

If you are behind on property taxes, take action immediately. Here are steps you can take:

• Contact your tax collector: Reach out to your county treasurer or tax collector to discuss your situation. They may offer payment plans or hardship programs. In Philadelphia, you can call (215) 686-6442 to ask about setting up a payment plan.
• Apply for relief programs: Many jurisdictions offer assistance for low-income, senior, or disabled homeowners. For example, Philadelphia has the Owner-Occupied Payment Agreement (OOPA) program that allows eligible homeowners to pay their taxes in monthly installments.
• Redeem the property: If your property has been sold at a tax sale, you may still have a redemption period to pay the delinquent taxes, interest, penalties, and costs to reclaim your property. The length of this period varies by state.
• Consider selling the property: If you cannot afford the taxes, selling the property may be an option. You can use the proceeds to pay off the taxes and avoid losing the property to a tax sale. In Los Angeles County, the most common way to sell a house with property taxes owed is to pay back the taxes using the proceeds of the home sale or giving the buyer a credit equal to the amount owed.
• Beware of scams: Scammers sometimes send fake property tax bills to trick you into paying them. Always verify that you are paying the correct government entity.

Remember, the longer you wait, the more interest and penalties accrue, and the closer you get to losing your property. Act quickly to explore your options.

Frequently Asked Questions

Can I go to jail for not paying property taxes?

No, you cannot go to jail for failing to pay property taxes. However, you can lose your property through a tax sale or foreclosure.

Does unpaid property tax affect my credit score?

As of recent years, tax liens no longer appear on credit reports, so unpaid property taxes do not directly affect your credit score. However, if your lender pays the taxes and adds them to your mortgage, that could affect your credit if you fail to make the increased payments.

What if I didn't receive a property tax bill?

Failure to receive a tax bill does not excuse you from paying property taxes. It is your responsibility to know when taxes are due and to pay them. You should contact your local tax office to update your mailing address and inquire about online bill viewing.

Can I get a payment plan for delinquent property taxes?

Many jurisdictions offer payment plans. For example, Philadelphia offers standard payment agreements and the OOPA program. Contact your local tax collector to see what options are available.

What is a tax lien sale?

A tax lien sale is when the government sells the right to collect the delinquent taxes to a third party. The buyer pays the taxes and then has the right to collect the debt from you, plus interest. If you fail to pay within the redemption period, the buyer may foreclose on the property.

Sources

• Overdue Property Taxes – Consumer & Business
• Property Tax Due Dates
• What happens if you don't pay your Philly property tax?
• STAR and property tax delinquency - Tax.NY.gov
• Unpaid property taxes (FAQ)