What Happens If I Don't Pay Property Taxes in Georgia?

Unpaid property taxes in Georgia generally lead to a tax sale. But the winning bidder from the sale can't get ownership of your home immediately.

You'll get some time to get caught up on the overdue amounts before losing your property.

How Do Property Taxes Work?

People who own real property must pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt. All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes.

How Does Georgia Handle Property Tax Non-Payment?

If you don't pay the delinquent taxes that are due, the sheriff may eventually:

• hold a tax sale without going to court (called a "nonjudicial tax sale"), or
• foreclose the lien in court (a "judicial tax sale") and then sell the home.

This article focuses on nonjudicial tax sales because it's the most common type of tax sale process in Georgia. (Generally, the judicial tax sale process is used for abandoned and blighted properties.)

Notice Before a Nonjudicial Tax Sale Takes Place

If you don't pay the taxes, you'll get a letter from the tax collector stating that you're behind and giving you 30 days to get caught up. (Ga. Code § 48-3-3). If you don't pay, you'll get a notice by personal delivery, registered mail, or overnight delivery 20 days before the sheriff publishes notice of the sale in a newspaper. (Ga. Code § 48-3-9, § 48-3-10).

Properties to be auctioned for delinquent taxes are advertised for four weeks. (Ga. Code § 9-13-141). Then, you'll get one more notice by registered or certified mail or overnight delivery ten days before the sale. (Ga. Code § 48-4-1).

How a Nonjudicial Tax Sale Works in Georgia

At the sale, the sheriff sells the home to the highest bidder. The county may bid and purchase the home if no one bids an amount sufficient to cover the past-due amounts, including costs. (Ga. Code § 48-4-20).

After the sale, the high bidder (the purchaser) gets a deed to the home, subject to your right of redemption (see below). (Ga. Code § 48-4-6, § 48-4-40). After the redemption period expires, the purchaser may foreclose the right of redemption (see below), which prevents anyone from redeeming. The purchaser then gets ownership of the home.

The purchaser will automatically get title to the property four years after the date the tax deed was recorded if the property isn't redeemed, even if the purchaser doesn't formally foreclose the right of redemption. (Ga. Code § 48-4-48).

Redeeming the Property After a Georgia Tax Sale

In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time. Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property. In other states, the redemption period happens before the sale.

In Georgia, the redemption period happens after a nonjudicial tax sale.

How Long Is the Redemption Period After a Georgia Tax Sale?

After a nonjudicial tax sale in Georgia, you get a 12-month redemption period during which you may reimburse the purchaser for the amount paid at the sale, plus other amounts, and reclaim your home. (Ga. Code § 48-4-40).

The Purchaser Must Foreclose Your Right of Redemption

The window to redeem might actually stay open longer, depending on when the tax-sale purchaser takes action to cut off your right of redemption.

To get ownership of the home, the purchaser must wait 12 months after the sale and then foreclose your right of redemption by giving you a written notice that the right to redeem will expire on a certain date. You can redeem up until the expiration date given in the notice, which is generally around 30 days after the notice. (Ga. Code § 48-4-46).

So, you get at least a year to redeem, perhaps a bit longer, depending on when the purchaser from the tax sale decides to take steps to terminate your right of redemption.

How Much You'll Have to Pay to Redeem Your Georgia Home

To redeem your home, you'll have to pay:

• the amount the purchaser paid for the property at the tax sale
• a premium of 20% for the first year or fraction of a year that has elapsed between the sale date and the redemption date (and 10% for each year or fraction of a year thereafter)
• any taxes the purchaser paid on the property after the sale, and
• any special assessments on the property. (Ga. Code § 48-4-42).

If you don't redeem until more than 30 days after the notice giving the redemption deadline, you also have to pay the sheriff's cost for serving you the notice and publishing the notice in a newspaper. (Ga. Code § 48-4-42, § 48-4-45). Georgia law requires the purchaser to provide the notice to the sheriff not less than 45 days before the date the right to redeem expires. Within 15 days, the sheriff must serve a copy of the notice to you. (Ga. Code § 48-4-46).

Setting Aside a Completed Tax Sale

In some rare situations—like if the tax lien or tax sale process has defects, the taxes were paid or not owed, or excusable neglect—you might be able to invalidate a completed tax sale.

The reasons that justify, as well as the procedures for, invalidating a tax sale are complicated. If you lose your home to a tax sale and want to learn more about setting the sale aside, talk with a qualified lawyer as soon as possible.

Does a Mortgage Survive a Tax Sale in Georgia?

If your loan isn't escrowed and you don't pay the property taxes like you're supposed to, your loan servicer will probably pay the delinquent taxes and then bill you for them. But why is the servicer concerned about the taxes? Because of the property tax lien's priority

Lien Priority

Property tax liens almost always have priority over other liens, including mortgage liens and deed of trust liens. (For purposes of this discussion, the terms "mortgage" and "deed of trust" are used interchangeably.)

Because a property tax lien has priority, the sale wipes out any mortgages if your home is sold through a tax sale process. So, the loan servicer will usually advance money to pay delinquent property taxes to prevent this from happening. Most mortgages have a clause allowing the lender to then add the amount it paid to your loan balance. You'll then have to make repayment arrangements with the servicer.

The terms of most mortgage contracts require the borrower to stay current on the property taxes. If you don't reimburse the servicer for the tax amount it paid, you'll be in default. The servicer might then foreclose on the home in the same manner as if you had fallen behind in monthly payments.

Your Servicer Might Set Up an Escrow Account

After demanding repayment of the amount it paid for the taxes, penalties, and interest (assuming you repay this tax debt), your servicer will probably set up an escrow account for the loan. Each month, you'll have to pay approximately one-twelfth of the estimated annual cost of property taxes—and perhaps other expenses, like insurance—along with your usual monthly payment of principal and interest. This money goes into the escrow account.

The loan servicer then pays the cost of the taxes and other escrow items on your behalf through the escrow account.

The downside to having an escrow account is that you'll have to make a bigger monthly payment to the servicer. On the positive side, having an escrow account saves you from having to come up with a large amount of money when tax bills, and perhaps other bills, are due.

What Options Do I Have If I Can't Afford to Pay My Property Taxes in Georgia?

Even though you'll get a redemption period after a Georgia tax sale, in most cases, it's better to take action before you become delinquent on your taxes to make them more affordable. You could, for example:

• find out if you meet the criteria for a property tax abatement, or
• request a change in the property's assessment if you feel your assessed property value doesn't reflect the fair market value.

Getting Help

If you're already facing a property tax sale in Georgia and have questions (or need help redeeming your property), consider talking to a foreclosure, tax, or real estate lawyer.