What Happens if I Fall Behind on My Property Taxes? 

Key takeaways: 

• If your property taxes are too high, you may be able to get some help from your local jurisdiction. 
• If you’re not able to dispute your tax bill, you may want to ask for a payment plan. 
• Failing to pay your property taxes is serious and could result in your losing your home. 

If you’re behind on paying your property taxes, or think you may be soon, don’t panic. It’s a scary situation to be in, but we have some guidance.  

First, a reminder about the mechanics of property taxes. Most homeowners who have a mortgage pay their property taxes as part of the monthly bill to their mortgage servicer. If you’re not sure, check your monthly statement to see if a portion is allocated to your property taxes.  

Some homeowners opt to pay their local government directly, however. And if your mortgage is paid off, you will have to make the tax payment yourself. For the purposes of this article, we’ll assume the latter situation applies to you. If you’re in the former camp, and unable to make your monthly mortgage payment, there are other options available. 

How to pay property taxes 

As mentioned for most homeowners, property taxes are included in the monthly mortgage payment, and their mortgage servicer takes care of sending the tax portion to the local taxing authority. If you have questions about whether the payments have been made correctly, contact your jurisdiction immediately. You can learn more about how these payments work with mortgage services from the Consumer Financial Protection Bureau.  

Don’t forget that you pay your mortgage monthly, but property taxes are typically paid to your local jurisdiction on a quarterly or half-year basis. Also, taxes are paid “in arrears,” or with a lag. In other words, you make payments in 2024 for a 2023 tax bill, for example. 

If you are responsible for making the payments yourself, either because you opted to do so while you still have a mortgage, or because you no longer have a mortgage, you should be prompt and proactive about it. Make sure you know when and where to submit the payment or payments and consider making the payment at least a few days before the due date to be extra-safe.  

What to do if your tax bill is too high 

If you believe the amount of taxes you owe is too high, you may want to look at the “assessed value” of your home and see if it warrants an appeal. In this case, “assessed value” is calculated as your home’s value during a specific time period by your local tax authorities. 

Home prices around the country have soared in recent years, and that means your tax bill may have as well. Local governments typically send notices at the beginning of the year to let taxpayers know that the assessed value of their property has changed, and those notices often contain information about how you can review and challenge that amount. Not all high tax bills are incorrect, but it is worthwhile to review.  

When you receive that notice, check it carefully. It should itemize exactly what your property tax bill includes — not just the tax you owe, but any deductions to which you are entitled. You may qualify for reductions in your tax based on your age, or because you use your home as a primary residence rather than an investment, for example. If nothing is listed, and you believe it should be, call your county assessor’s office.  

You should also make sure that your home is described correctly. You can call the assessor’s office, or check the website, to find the description that your assessed value is based on. You want to ensure you’re not paying taxes for bedrooms, square footage or upgrades, like a pool or an addition, that you don’t have.  

If you’ve gone through those steps and still feel the amount is unfair, make your case in writing. Notices of property taxes usually include instructions for appeal. Follow them meticulously. They generally will ask for supporting evidence, like photos of your home and some of the others in your neighborhood, as well as selling prices of similar properties in your neighborhood within the specified time period. Online real estate sales platforms can be of help in finding out these prices.   

If you still need help paying property taxes 

Whether or not you dispute your home’s assessed value, you should contact your local tax authority as soon as you realize you may have trouble making payments. Ask them what options you have. Each state is different, but you might qualify for an exemption based on your age, disability, income status or other factor.  

Another option might be a tax relief or tax deferral program, which can reduce the amount of property tax you must pay or provide some additional time to pay your taxes. These programs vary widely, but you may qualify for a reduction in your taxes because of age, status as a veteran, improvements you’ve made to your home, whether you rent part of your property to low-income tenants, and much more. Start by checking to see if your county or state offers any assistance. AARP and other nonprofits may also offer support.  

Separately, the taxing authority should also be able to work with you to establish a repayment plan — but that may only be an option before you’ve become delinquent, not after, so it’s best to be proactive as soon as you believe you will not be able to make your tax payment. If you ask for a repayment plan, also make sure to ask if the authorities can waive penalty fees and interest.  

How to pay back taxes 

Once you have a payment plan that you’re comfortable with, use the breathing room to get your finances in order. Consider making changes to your budget, contact a credible debt relief firm or financial coach if you are struggling to manage overall debt. And make the payments you’ve promised, on time and in full.  

If you don’t pay property taxes you owe, you could lose your home. The county where you reside could place a lien on your property. If you fail to pay off the lien, your house may eventually end up in foreclosure.  

If you pay your taxes through your mortgage company and fail to stay current on payments, you’ll need to reimburse the company for the taxes they covered on your behalf. If you continue to fall behind, your mortgage company could hold you in default and foreclose on your home.  

Unlock also requires homeowners to stay current on their property taxes as a condition of our home equity agreement. If you are struggling to pay your property taxes, please reach out to our customer support team. 

Summary 

Like so many components of personal finance, paying property taxes isn’t pleasant, but it should be manageable for you if you educate yourself and ask for help when you need it. There are often options available if you reach out to your local taxing authority.