The Real Estate Encyclopedia
What Happens If I Fail To Pay Property Taxes?
Category - Home Ownership Questions - General Home Ownership FAQ's

If you fail to pay property taxes, you will be found to be delinquent and lose the property.  In some states, the title of a delinquent property is transferred to the county or state.  The state may allow period during which the owner of the property or a lien-holder can pay back taxes and any accrued penalties and redeem the property.  If the owner fails to pay outstanding taxes and penalties during the allowed time, the property is sold at a public auction and the highest bidder receives a tax deed.  Some states will hold the sale soon after the delinquency occurs with a redemption period following the sale. At the sale, a tax certificate or certificate of sale in the amount of the unpaid taxes is sold.  The buyer is entitled to a deed to the property as long as the delinquent owner or tax payer or anyone holding a lien does not redeem the property by paying overdue taxes, during the redemption time.  If the property is redeemed, the buyer receives the money back plus interest. 

 

In most instances, the lien holder is a lender.   A lien-holder is allowed to redeem the property because the lien holder’s creditor rights to the are superseded by the superiority of the tax lien. 

 

The government’s right to take a property from his land or home for failure to pay taxes is clearly defined by law.  However, if the sales procedure is not followed properly, the new buyer could later find the title to this property  challenged in court.  Therefore, it is advisable that the buyer complete a title search and obtain title insurance for the property purchased under these circumstances. 

 
Category(s)
Home Buying Questions - Insurances & Taxes FAQ's
Home Buying Questions - General Home Buying FAQ's
Home Ownership Questions - General Home Ownership FAQ's
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