What’s the Worst Thing That Can Happen If You Don’t Pay Your Property Taxes?

If you don’t pay the property taxes that you owe on your home, you could lose it.

When property taxes go unpaid, the amount you owe becomes a lien on your house. If you don’t pay off the amount you owe, the house could be sold in a tax sale. In other instances, the house may be put in foreclosure before being sold.

How Soon You’ll Lose Your House

How quickly can a home with unpaid property taxes be sold? It typically takes one to three years.

“Paying property taxes on time is critical since not paying for as little as one year in some municipalities allows that municipality to place your property on the upcoming property auction list,” says Kassi Fetters, owner of Artica Financial Services.

Fetters went on to point out that once your property is auctioned off, that municipality will pay off your property tax debt, late fees, and auction fees for you. Then you get what’s left. “I’ve seen this happen for nonpayment of property taxes after only two years,” said Fetters.

Redeeming a House

If you have enough money, you may be able to get your house back. It is possible for a homeowner to redeem the property after a tax sale by paying the sale amount or back taxes owed plus interest. How long you have to redeem a property varies from state to state.

How to Avoid Being Late on Property Taxes

Using escrow is one way to make sure you have enough money to pay your property tax bill.

“This means that your property taxes are added to your mortgage payment, so it’s done automatically,” says Noah Damsky, a Principal at Marina Wealth Advisors. “This is the most convenient method because it’s built into your regular budget and doesn’t require you to make multiple one-off property tax payments each year.”

You can also make direct payments to your local tax collector. Start saving early in the year to have enough for your property tax payments.

“You can make one-off payments each year to your county property assessor online, so it’s convenient; you just have to make sure you make the deadlines. There are often soft deadlines that can be missed without penalty and firm deadlines weeks later that carry stiff late penalties,” Damsky says.

Make a plan for paying your property taxes. Put aside a little each month so you’ll have the full amount saved by the time your property taxes are due.

The Bottom Line

Falling behind on your property tax payments could cause you to lose your home. This could happen in a year to three years, so you could go from being a homeowner to living without a house in a short period of time.

If you still want to keep your home and you have saved enough money, you can redeem it after a tax sale by paying the sale amount of the house or taxes that are owed plus interest. To avoid falling behind on your property taxes, put aside some money each month so you’ll have enough to cover your property taxes when they come due.