How Long Can You Go Without Paying Property Taxes?
A home owner can go about five and a half years without paying property taxes in all of the counties in Utah. It is also important to understand how payments are applied to your property taxes once you get behind in your property taxes.
“In this world,” to quote Benjamin Franklin, “Nothing can be said to be certain except death and taxes.” If you’re a homeowner, you know that statement to ring true more than others. Your mortgage payment each month, for example, is comprised of the principal, interest, property taxes and insurance (P.I.T.I.). And in some cases property tax rates may have increased in your area forcing your mortgage payment to go up to fund the escrow account. An increasing house payment can be hard on people. People that have paid off their mortgage have to pay their property taxes and home owners insurance out of their own pocket each year because there is no more escrow account. This can be especially difficult on people with a fixed income.
Sometimes your mortgage may not have an escrow account for property taxes and home owners insurance. And if you’re in a financial rut or in a situation where you cannot pay your property tax, what do you do? You might be wondering how long can you go without paying your property taxes in Utah before you ultimately lose your property.
Unfortunately, it’s not just missing a mortgage payment which can result in losing your home & property. You can also lose your home if you don’t pay your property tax due each year regardless if you have a home on the land or not. So, how long can you go without paying property taxes is an important question.
When property tax is not paid a lien can be placed on the home by filing certain paper work with the county. The median property tax paid in Utah as of February 2023 is $1972.00 based on the median home value of $345,000.0 However, many homes in Utah are valued in the low 400’s which means property tax amounts closer to $2200.00.
How Late Can I Pay My Property Taxes?
In Utah, the Property Tax Redemption Period ends March 15 of the current year for property taxes that are five years late. This means if you have property taxes due for 2018, and it is past March 15, 2023, you can no longer bring your property taxes current. Any late property tax payment received before March 15 of 2022 will be applied to the most current tax year first. Once any property tax becomes five years late, each year owed must be paid in order to stop a property tax sale; which in Utah occurs the fourth Thursday of May or May 25th in 2023.
Lets assume you owe property taxes on your Salt Lake City home for 2018, 2019, 2020, 2021 and 2022. Any payment you make by March 15th of the current year will be applied to 2022 first, then 2021 and so on. So in this example, if you make a property tax payment that is enough for 4 years of property taxes, you will still owe property taxes for 2018. Since 2018 property taxes due is 5 years old, the house will be auctioned off on the 4th Thursday of May.
However, the ramifications of not paying property taxes can begin much earlier than the 5 year mark. A state tax lien can be filed against you if no prior arrangements are made with a state or county tax commission for regular payment. Not only will a state tax lien likely prevent you from selling or refinancing property in the near future; but it will also make it next to impossible to acquire credit. Once filed, a lien is entered into public record; even if it’s withdrawn as a result of paying the full balance. That lien will still appear on credit reports (listed as set aside) for up to eight years after—even if the property changes hands.
How to Stop a Property Tax Sale?
The most simple answer is to pay off any current or outstanding taxes and fees in full. This includes interest and penalties; the latter of which can be up to 2.5 percent of the original tax by Utah state law.
There are property tax relief programs available in Utah. For example, here is the Salt Lake County property tax assistance program. The Salt Lake County Treasurer is responsible for the administration of the program in Salt Lake County, and each county in Utah will have a property tax relief program. Call your local County Treasurer for more information.
However, for some of you, this may not be an option you qualify for. Perhaps you recently experienced a divorce or a serious illness in the family. Or simply found yourself in dire financial straits. You’ve tried to keep your head above water as best you can; but between monthly mortgage payments and ever increasing bills, there’s simply not enough left to hand over to the state.
Even if you have years of unpaid property taxes, you can avoid damaging both your credit and your financial stability by selling your home or work out an agreement with the county your property taxes are due in.
A professional home buyer like Gary Buys Houses will typically pay in cash and close in as little as 3-5 business days. Which, in comparison to the estimated 30-60 days from a traditional home buyer it can take to sell your home in Utah, that goes a long way in relieving both your stress as well as county tax official’s demands. We also have programs which allow you to stay in your house for weeks, months or even years after you sell your house. Our goal is flexibility that serves the house seller the most.
But whether it’s a temporary setback, a drastic financial loss or simply a momentary case of absent mindedness, taxes are—as we indicated early on—inevitable.
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