Paying Your Property Taxes 101

Published on September 6, 2017, by in Information.

The following content is copied with permission according to SRRPUB11 – State Website Guidelines – State Agency Link and Privacy Policy (Section 1D) Original Source: Window on State Government, April 8, 2011. Neither the site owner nor the information, as it is presented on the HomeFront Tax Loans website, is endorsed by the State or any state agency.

Paying Your Property Taxes

Taxing units usually mail their tax bills in October. The delinquency date usually is Feb. 1. If Feb. 1 is drawing near and you haven’t received a tax bill, contact your local tax offices. Find out how much tax you owe and make sure your correct name and address are on record.

Your tax bill may include taxes for more than one taxing unit if these taxing units have combined their collection operations. School tax rates must be divided into maintenance and operations, as well as debt service, for the previous and current tax years. Both the property owner and the owner’s designated agent must be mailed tax bills.

If your mortgage company pays the property taxes on your home, the mortgage company will receive the tax bill.

The tax collector must give you a receipt for your tax payment if you ask for one. Receipts are useful for federal income tax purposes and for ensuring that your mortgage company has paid the taxes on your home. In addition, your tax receipt is evidence that you paid the tax if a taxing unit sues you for delinquent taxes.

If you appeal your value to district court, you must pay your taxes – usually the amount that is not in dispute – before the delinquency date. You may ask the court to excuse you from prepaying your taxes. You must file an oath of “inability to pay” the taxes in question and argue that prepaying the taxes restrains your right to go to court on your protest. The court will hold a hearing and decide the terms or conditions of your payment.

You have no legal right to withhold taxes or to put taxes in escrow to protest government spending or for any other reason. You must express your concerns in taxing unit budget hearings. However, you may make a payment under protest as indicated on the check or in a transmittal letter.

When is the deadline for payment?

In most cases, the deadline for paying your property taxes is Jan. 31. Taxes that remain unpaid on Feb. 1 are considered delinquent. Penalty and interest charges are added to the original amount.

Taxing units must give you at least 21 days to pay after they mail your original bill. If your bill is mailed after Jan. 10, the delinquency date is postponed. You have until the first day of the next month that will provide at least 21 days for paying the bill. If the taxing unit mails your tax bill on Jan. 15, therefore, your taxes don’t become delinquent until March 1. The delinquency date will be printed on your bill.

Most property owners pay their property taxes before the year’s end so they can deduct the payments from their federal income taxes.

Check with the tax collection office on local payment options that may be available, such as:

  • Discounts, if you pay your taxes early;
  • Split payment of taxes, allowing you to pay half your taxes by Nov. 30 and the remainder by June 30 without any penalty;
  • Partial payment of your taxes;
  • Payment by credit card, with an additional fee of up to 5 percent;
  • Escrow agreements for a special year-round account;
  • Work contracts, in lieu of paying taxes, for certain taxpayers doing certain duties; and
  • Installment payments for homestead taxes for persons aged 65 or older years of age or disabled are available to any taxpayer who qualifies.

You may defer some of your homestead taxes if you choose. The taxes that may be deferred are those for any value exceeding 105 percent of your home’s appraised value, plus any new improvements, from the preceding tax year. You must file a deferral application with the appraisal district before the taxes beocome delinquent, and you must pay the taxes based on 105 percent of the home’s value.

If you are qualified for the aged 65 or older or disabled homestead exemptions, you may pay your current taxes on your home in four installments. You must pay at least one-fourth of your taxes before the Feb. 1 delinquency date. The remaining payments are due before April 1, June 1 and Aug. 1, without any penalty or interest. If you miss an installment payment, you will face a 6 percent penalty and also pay interest at 1 percent for each month of delinquency. You must indicate on your first payment that you are paying your home taxes in installments. Installment payments apply to all taxing units on the tax bill.

Persons qualifying for aged 65 or older or disabled homeowner exemptions may defer payment of their taxes (see Property Tax Basics, Chapter 5 – Collections, Section 5.3, Deferring tax payments).

Homeowners whose residences are damaged in a disaster and are located in a designated disaster area also may pay their taxes in four installments, in the same months as aged 65 or older or disabled homeowners do.

What if you don’t pay your taxes?

The longer you allow your delinquent property taxes to go unpaid, the more expensive and risky it becomes for you.

  • You will have penalty and interest charges added to your taxes.

Regular penalty charges may be as high as 12 percent, depending on how long the tax remains unpaid. Interest will be charged at the rate of 1 percent per month, with no maximum. Private attorneys hired by taxing units to collect delinquent accounts can charge an additional penalty to cover their fees.

  • You will receive delinquent tax notices.

The tax collector will send you at least one notice that your taxes are delinquent. They often send additional notices and warnings.

  • You may have the option to set up an installment plan.

Some tax collectors will allow you to pay delinquent taxes in installments for up to 36 months. They are not required to offer this option, however.

Before signing an installment agreement, you should know that the law considers your signature an “irrevocable admission” that you owe all the taxes covered by the agreement.

  • You may be sued.

The tax collector’s last resort is to take a delinquent taxpayer to court. Court costs will be added to the delinquent tax bill.

Each person who owns taxable property on Jan. 1 is liable for all taxes due on the property for that year. A person who owned taxable property on Jan. 1 can be sued for delinquent taxes even if the property has been sold or transferred since then.

  • You may face problems in selling your property.

Each taxing unit holds a tax lien on each item of taxable property. A tax lien automatically attaches to property on Jan. 1 each year to secure payment of all taxes. This tax lien gives the courts the power to foreclose on the lien and seize the property, even if its ownership has changed. The property then will be auctioned and the proceeds used to pay the taxes. As a result of the tax lien, someone who purchases real estate cannot obtain a clear title until all the delinquent taxes owed on the property are paid in full. If you are buying a portion of a larger parcel of land, check the taxes on the larger parcel. You will not be able to clear a tax lien against your part unless taxes on the whole are paid.

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