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What happens if I fall behind on my property tax?

On Behalf of | Aug 21, 2017 | Tax Law

Although it comes at the same time twice a year, your property tax bill likely surprises you. Like countless others in Ohio, that often unplanned-for expense will either wreck your budget or go to the back burner where you will deal with it later. However, later may not come until the next tax bill arrives, further complicating your financial situation.

Letting bills go unpaid always has damaging consequences, but property taxes have an urgency that the government expects you to acknowledge. Failing to pay your taxes on time may mean interest and penalties added to an already high bill. Neglecting to pay altogether can bring devastating results.

The importance of paying taxes on time

State and local authorities use property taxes to fund many projects for the common good. For example, schools in your area receive a portion of your taxes. The government also relies on taxes to pay for emergency services, road maintenance and other important amenities. While it may seem like tax agencies are taking from you, entire communities benefit from property taxes.

Nevertheless, if you are already struggling financially, having that bill dropped on you may seem like the worst thing that could happen to your budget. While the temptation to ignore it may be great, you can be assured that it won’t go away just because you pretend it doesn’t exist. In fact, the government has many options for claiming the money it says you owe, including:

  • Adding penalties and interest, which, in some jurisdictions, may even be calculated for each day your payment is late
  • Placing a lien on your property to prevent you from selling it
  • Blocking your ability to obtain a mortgage
  • Foreclosing on your property

Yes, the government can foreclose on your property for unpaid taxes just as a bank can foreclose for unpaid mortgage payments. This may result in an auction during which the highest bidder takes ownership of your home. In other cases, authorities may sell your tax debt to a third party, who then has the right to foreclose on your property according to Ohio laws. Your local government may simply place your house on the market and sell it to claim the taxes you owe.

Falling behind on property taxes is nothing to take lightly. However, if your tax debt is symptomatic of other financial problems, you may have options for finding relief. Speaking with a bankruptcy attorney may help you obtain information about the alternatives available to you for avoiding foreclosure on your home and reaching a place of financial stability.