Property taxes, or real estate taxes, help pay for services that we deem important as a society, like public schools, but it only works if everyone pays their fair share. So what happens to a property owner who does not pay their property or real estate taxes? Quite frankly, the consequences are big. Once property taxes come due and are not paid, the governing municipality will begin to charge interest on the delinquent payment, and the balance owed will begin to rise. After a state law specified amount of time, it could be a few months to a few years, the property may go up for auction. The winning bidder, after paying the delinquent taxes, may receive a lien against that property in the form of a tax sale certificate, or in some jurisdictions, may receive free and clear title to the property. In some states there is no auction; the taxing authority will take ownership of the property
If the consumer has given a mortgage on the property, and the real estate taxes are escrowed, the taxes should be paid out of the consumer's mortgage payment. As long as the consumer makes their mortgage payments, the taxes should not go delinquent. If the consumer defaults and no longer makes their regularly scheduled payments, the lender or holder of the mortgage generally ensures the real estate taxes are paid to protect their interest.
If you ever find yourself with delinquent property taxes, you should pay them if you can, or contact the taxing authority for clarity regarding what other options you may have.
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