What Happens to Delinquent Property Taxes When the Owner Dies?

Local governments across the country--be they city, county, village or any other kind of municipality--raise money to provide services such as public education and public safety from property taxes. When you pay your property taxes each year, a percentage goes to each local government jurisdiction that has a stake. Therefore, when property taxes aren't paid, local governments suffer budget shortfalls and local services are threatened. Because of their great importance in the functioning of municipalities, property taxes take a senior position even to the first lender on a property.

Property Tax Delinquency

When people are behind on their taxes, the only recourse local governments have is to sell the tax liability or tax liens at a public auction. Interested investors buy these liens inexpensively and typically for a guaranteed rate of return if and when the delinquent taxpayers pay what they owe. If this doesn't happen, the investor who bought the tax lien has a right after a period proscribed by law--which varies for each state--to take over the property. If the delinquent taxpayers pay, they typically also pay late payments and interest. With these, the local government pays off the investors who bought the tax liens. Meanwhile, by having a tax sale, local governments are able to raise money to meet their immediate needs. If you're interested in investing in tax liens, start with the website of your city and county and familiarize yourself with the local laws that govern tax liens and tax sales. Also see a link in Resources below for more educational resources.

Deceased Property Owner

Even if the owner of a property dies, property taxes are still due. Each local jurisdiction may have certain exceptions or provisions to defer payment in certain special circumstances. Check with your local authorities. However, even if a person dies, property taxes must be paid at some point--and especially when the house is sold, at which point all back taxes owed will have to be paid.

About the Author

Faith O has covered politics and general news in Washington DC, Chicago and Maryland. Her writing has appeared in the Associated Press, Prince George's Sentinel, Northwest Indiana Times, Chicago Defender and Daily Southtown, among others. She has a Masters of Journalism from Northwestern University's Medill School and a Bachelor's degree from Hampshire College in Amherst.