Any person or company that owns property is required to pay property tax. Because such taxes are important to the infrastructure and functionality of every city, county and state, the penalty for failing to pay property tax can be severe, ranging from ongoing fees and penalties to the loss of personal property. The exact amount of time you have to pay your past due property taxes depends on where you live.
Each county or municipality is responsible for assessing property tax and determine any penalty-free grace period. If you're late paying your property tax, you'll typically owe late fees and/or penalties. But in a worst-case scenario, the tax assessor can place a tax lien on your home and force the sale if you cannot pay back taxes.
Property taxes are one of the oldest forms of taxation in the United States. Unlike many other forms of taxation, the benefits of property tax can be seen in your own backyard. Important public services such as schools, libraries, hospitals, police and firemen are all funded by property taxes. Local infrastructure, including roads, public parks and public transportation, also are supported by property taxes.
The responsibility of collecting property taxes usually falls to the county Department of Treasury. Some counties determine the delinquency date of property taxes relative to the end of the fiscal year, which for most businesses and governments is June 30. However, others require a certain portion of your annual property tax to be paid quarterly.
The property tax year in New York City, for example, follows a fiscal year with a term that extends from July 1 to June 30. Due dates for paying property taxes vary, depending on a property's assessed value. For properties with assessed values less than $250,000, property owners make quarterly tax payments on July 1, October 1, January 1 and April 1.
Each due date has a two-week grace period, during which payments can be made without a late interest penalty. For properties with assessed values greater than $250,000, property owners make two annual payments -- one by July 1 and the other by January 1, with no grace period.
Interest and Fees
In the above example for New York City, property owners who make property tax payments after the grace period are charged interest on the unpaid balance from the original due date ... not from the end of the grace period. On the flip side, property owners receive prorated discounts for making early payments -- from 0.125 percent to 0.5 percent discount, depending on when the full amount is paid early.
Payment in Full
Once an individual has been notified that he is in default on his property taxes and still fails to meet his tax obligation, the county to which he owes tax may legally place a lien, or claim, on his property. This can include personal property of any value, including your home, car and other valuables.
In some cases, the county may file a law suit against you or even seize and foreclose your home. If you are past due on your property taxes, you should make every effort to pay in full as soon as possible, and, if possible, contact your county tax department about possible payment plan options.
- New York City Department of Finance: Due Dates
- Property tax - Wikipedia
- Lawyers.com: When you Can't Pay Your Property Taxes
- U.S. Census Bureau. "Local Governments in Northeast More Reliant on Property Taxes than South and West." Accessed Nov. 26, 2019.
- Organisation for Economic Co-operation and Development. "Tax on Property." Accessed Nov. 26, 2019.
- Internal Revenue Service. "1.14.4 Personal Property Management." Accessed Nov. 26, 2019.
- Tax Foundation. "States Should Continue to Reform Taxes on Tangible Personal Property." Accessed Dec. 18, 2019.
- Tax Foundation. "Testimony before the House Ways and Means Select Revenue Measures Subcommittee." Accessed Dec. 18, 2019.
- Internal Revenue Service. "With New SALT Limit, IRS Explains Tax Treatment of State and Local Tax Refunds." Accessed Dec. 18, 2019.
Sophia Harrison began writing professionally in 2007. She has a Master of Arts in economics from the University at Buffalo-SUNY, as well as experience working in the New York City financial industry.