Options If You Can't Pay the Property Tax on Your Home

If you're struggling to pay the property taxes on your home, you could be at risk of losing the property to foreclosure or a tax sale. But there are several things you can do to either reduce the amount of property tax that you have to pay or to buy yourself some extra time to get caught up on what you owe.

Challenging Your Home’s Assessed Valuation

One thing you can do to reduce the property taxes you have to pay is to challenge the assessed value of your home. (The property taxes are primarily based on your home’s assessed value.)

All states have specific procedures for challenging—or “appealing”—the assessed value of the home. Typically, you’ll need to dispute the value shortly after you receive the bill. To prevail in your challenge, you must show that the estimated market value placed on your property is either inaccurate or unfair. Also, some states require that you pay the bill before making the appeal. You’ll then typically get a refund if you’re successful in your challenge.

Be sure to follow the procedures carefully otherwise you might lose the appeal. Check the tax assessor’s website online or review your property tax bill to learn about the specific procedures, as well as what sort of documents and evidence you’ll need, to make your challenge to the value the assessor placed on your home.

Abatement, Deferral, and Repayment Programs

Each state has property tax abatement (reduction) or exemption programs that allow certain homeowners to reduce the amount of property tax they must pay based on age, disability, income, or personal status. For example, older homeowners and veterans often are entitled to a reduction of their property taxes. Ordinarily, you’ll have to apply for the abatement and provide proof of eligibility.

In some states, abatement isn’t possible if you’re already delinquent in your tax payments. But you might qualify for:

• a deferral (where you’re allowed to postpone paying the taxes if you meet eligibility requirements), or
• a repayment plan.

In addition, many states permit the taxing authority to compromise on the amount of taxes that are due or to waive penalties and interest.

Losing Your Home for Failure to Pay Property Taxes

When you don’t pay your property taxes, the taxing authority could sell your home—or its lien on the property—to satisfy your debt. Or, your mortgage lender might pay the taxes itself and then bill you. If you fail to reimburse the mortgage lender, it might foreclose on your home. (To get details on how both of these processes work, see What Happens If You Don’t Pay Property Taxes on Your Home?)

If you're facing a potential foreclosure, consider contacting an attorney to find out about your options.