- Adding interest to the amount of taxes not paid is a common practice by municipalities. In one Wisconsin county, interest might accrue at 12 percent per year, while in an Arizona county, interest is assessed according to state law at 16 percent per year, prorated monthly. In a California county, a 10 percent penalty is added to the payment amount as soon as it becomes overdue, and a monthly penalty accrues at a rate of 1.5 percent on the unpaid tax amount.
- Tax assessing agencies and districts also assess fees once property taxes are in arrears. The initial fee may be an amount such as $10 or more added to the delinquent payment. After a period of time during which the taxes fall into a state of default, the assessor may impose a redemption fee. The owner would need to pay the back taxes, plus interest, costs and the redemption fee.
- In some areas, once a property owner misses a single property tax installment, the entire year's worth of property taxes becomes immediately delinquent, and the only acceptable payment is the annual tax balance, plus interest and penalties. The tax default may be published in the newspaper and the lender notified. The lender may declare the loan in default and initiate foreclosure. The tax authority may file suit against the delinquent property owner and place a lien against the property -- a lien that supersedes all mortgages. The lender may pay the tax liability and foreclose.
- In some communities, policies toward unpaid taxes give the property owner time to try to pay back taxes, even permitting installment plans, provided that the property owner attempts to rectify the debt promptly and earnestly. In other areas, systems do not provide for acceptance of any payment but the entire amount due. After the period of time designated by local ordinance, the county or other tax-levying body offers the property for sale or liquidation. In some areas, the sale takes place on the courthouse steps.
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