Many people who get into a home do not think about all of the different expenses that come with homeownership. In addition to the mortgage payments, one must consider homeowner’s insurance, HOA fees, maintenance costs, and property taxes, to name a few. Property taxes can hit a homeowner hard year after year, and there may come a time when you simply can’t afford them. What should you do when that happens? First, it is important to remember not to panic. Things aren’t lost quite yet. You do have some options you can consider.
Finding the Money to Pay the Taxes
If you have savings or items that you could sell, such as an additional car you rarely use, doing so is better than not paying your taxes. In some cases, it might even come down to borrowing some money from family to pay the taxes. When that’s what you need to do, then you do it. However, this may not solve your problem. I only suggest considering borrowing from family if you foresee your current financial hardship to be temporary. You have to consider, what happens if you can’t pay next year, or if you can’t pay back the relatives good enough to let you borrow money? You do have some other options that might work, and it is worth exploring those possibilities as well.
Calling the Tax Assessor’s Office
Get in touch with the assessor’s office if you feel you might have trouble paying your taxes on time. Many Assessors offices have a number of programs available that might provide you some relief. For example, the Los Angeles County Treasurer and Tax Collector allows partial payments to be made (with a 10% penalty on the unpaid balance). LA also offers a ‘5-Pay Plan’ in which you can pay your delinquent taxes in 5 easier payments. Visit your local assessors office to find out what programs are available in your city. (For more info on assistance programs from the Los Angeles County Tax Collector, click here)
Check the Value of Your Property
If you bought your home at the peak of the market, the actual value of your property might not be as high as it once was. This could mean you are paying more in property taxes than you should be. If the property value has dropped, it doesn’t hurt to ask the assessor’s office for a reassessment on the home. This could reduce what you owe in property taxes, making payments much easier.
What If You Still Can’t Pay
After you’ve exhausted all of the possibilities, including the few listed here, and you find that none of the options will work for you, it might be time to face the reality of selling. Getting rid of your home might not be the choice you want, but it may be the best choice for your finances. When the property taxes start to become too hard to pay, the mortgage will usually follow shortly thereafter. You do not want to lose your home and ruin your credit at the same time. The last thing you need hanging over your head is a foreclosure. Getting rid of a home you cannot afford can ensure you keep your finances in good standing so you can eventually buy another home down the line.