Paying property taxes is a necessary part of owning any piece of property. It is a financial obligation required of you, the fulfillment of which does not depend on whether you like to pay it or not.
“But I have not been paying property taxes,” you may say to yourself. Although you may not currently be paying a bill marked as “property taxes,” however, if you have been making monthly mortgage payments on your home to your lender, then you have most likely been paying for property taxes.
This is so because a typical mortgage payment is made up of the principal amount, interest, payment for homeowner’s insurance, and yes, property taxes. If your lender required you to pay extra amounts of money each month, then it was most likely put into an escrow account in order to be used to pay off property taxes and homeowners’ insurance premiums on your behalf.
The good news is that there may be excess funds left in your escrow account, and if there are still excess funds left in the account after you have submitted your final mortgage payment, then your lender is expected to fully reimburse you the amount due. Fir this reason, it is crucial to remember to ask your lender if any funds were leftover in your escrow account and when you will be receiving reimbursement.
After you have received your reimbursement from the escrow account, we advise that you begin to put a similar amount (similar to the amount that your lender put into the escrow account each month) into your own escrow account. By doing this, you’ll never be caught unprepared for a property tax bill.
Are you required to pay property tax after your mortgage is paid off?
The exhilarating feeling of freedom that comes along with knowing that you have settled your mortgage bills is one that can be compared to almost nothing else. It means that you can now finally relax and put your feet up; however, does it mean that you are done for good with making payments on your property? No.
We hate to be the one to break it to you, but completing your mortgage payments isn’t the end of making payments on your property. You are still required to make property tax payments on your house even after the mortgage has been fully paid for. The difference is that you are no longer required to make those payments to your lender; now, you are required to pay your property taxes directly to the local government.
Can my house be repossessed if I fail to pay my property tax?
The bad news is that your house can be repossessed by local tax authorities if you fall behind on your property tax payments. This verdict does not matter whether or not your mortgage has been paid for in full.
The best way to avoid this predicament is to plan ahead by calculating what you owe in property tax each year, breaking it up into monthly payments, and putting it in an escrow account each month towards the resolution of your property tax bills. If you fail to take your property taxes into account and plan accordingly, you may end up losing your house, regardless of whether or not you have fully settled the mortgage payments.
We are a tax relief firm dedicated to giving you the best results regarding resolving your tax debts. Our team of qualified professionals is available round the clock to provide you with the assistance you need. Contact us now at 888-585-8629 or 617-430-4674 or send us an email at [email protected].
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