Tax Lien Sales and Foreclosure

Tax Lien Sales and Foreclosure gives you a clear, step-by-step way to understand what drives your bill, what to verify on your notice, and what to do if the numbers look off.

If taxes remain unpaid, local governments can sell the tax debt or the property itself. Many municipalities will auction off tax liens or foreclose on homes to recover unpaid taxes. According to Investopedia, if you don’t pay, “the house could be sold in a tax sale” 34 , sometimes after just one year of non-payment. In fact, one financial adviser notes that in some places, “not paying for as little as one year … allows [the municipality] to place your property on the upcoming property auction list.” He’s seen homes auctioned off after only two years of unpaid taxes 36. Once the property is auctioned, the winning bidder pays off the back taxes, fees and penalties. The original

homeowner is typically given a short redemption period – time to pay all that is owed to reclaim the home. If you fail to pay during redemption, the new owner takes title. The bottom line from experts is clear: not paying can lead to losing your home within a couple of years 36. How to Avoid This Worst Case To avoid this, treat your property taxes as a top priority bill. Here are some tips:

• Budget Monthly: Start setting aside money each month so you’re prepared. Financial advisors

recommend escrowing taxes into your mortgage if possible. That way, a portion of each mortgage payment goes into a tax escrow account, and your lender pays the tax on time. It’s the simplest way to never “forget” a payment.

• Pay Early: If you can, pay your taxes as soon as the bill arrives. Some jurisdictions even offer small

discounts for early payment. 6

• Negotiate or Defer: If you truly cannot pay, investigate hardship programs. For example, NYC has a

Property Tax and Interest Deferral (PT AID) program allowing eligible seniors or low-income homeowners to defer taxes. Other areas may offer payment plans.

• Monitor Notices: Always open and read your tax notices. If your lender handles it, check your

mortgage statement to ensure payment goes through. Missing a notice should never mean missing a payment!

• Appeal if Necessary: If your tax seems unreasonably high, consider an appeal (before it’s too late).

This can lower your bill. ProptaxHelper’s appeal guidance can help you challenge an inflated assessment in time. The Redemption Option If you do fall behind, there’s often a chance to “redeem” your property. Most states allow owners a redemption period (often 6 months to a year after a tax sale) to pay the owed taxes plus interest/fees to reclaim the home. If you have the funds, this can stop the foreclosure from becoming permanent. However, redemption typically requires paying not just the back taxes but also all accumulated penalties. It’s an expensive but sometimes necessary option to save your home. Key Takeaway: Never ignore your tax bill. Even one year of unpaid property tax can set off a chain reaction

ending in foreclosure. If paying your full bill at once is hard, contact your tax office about payment plans before you miss deadlines. And remember: ProptaxHelper offers tools and advice to help manage or appeal your taxes so you can avoid the worst outcomes.

Next steps

• Use the Property Tax Estimator to sanity-check your bill.
• If something looks off, run a quick Appeal Savings scenario.
• Scan the Articles list for related topics like exemptions, deadlines, and escrow planning.