When property owners do not pay property taxes, tax authorities can foreclose on the property and sell it to pay off the debt or sell the tax lien to a buyer who can foreclose on the property and sell it, reports Nolo. Alternatively, if the property owner is still paying off a mortgage, the lender may advance funds to pay property taxes and then threaten foreclosure if the owner does not reimburse the funds.
Unpaid property taxes become liens on the properties, and property tax liens usually have priority over mortgages and other liens, explains Nolo. Mortgage lenders often pay property taxes to avoid sales of the properties by tax authorities. Otherwise, tax authorities can take property titles without selling them, sell them to other buyers or sell the liens only. The debt lien purchasers can then initiate collection of the debts along with interest and penalties or sell the properties.
In most jurisdictions, property owners have the right to redeem their properties even after tax sales by paying off the debt with interest within a specified period of time, according to Nolo. Property owners who find it difficult to pay taxes can apply for tax exemption or abatement programs, request deferrals, or work with tax authorities to set up repayment plans. They can also challenge their property’s assessed value to try to reduce the tax load.