Foreclosure in Sacramento>Question Details

Zombody, Other/Just Looking in Sacramento, CA

I was not able to short sale my home. The public auction sale date is a few days before proprty taxes are due. Do I have to pay the property tax?

Asked by Zombody, Sacramento, CA Wed Dec 1, 2010

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16
I would file a chapter 13 bankruptcy and stop all the madness so you can figure out what you are doing.
0 votes Thank Flag Link Thu Dec 9, 2010
The county assessor's office does not accept partial payments and they'll send the check back if it's less than the amount due.
0 votes Thank Flag Link Thu Dec 2, 2010
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
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After a foreclosure by trustee sale, the foreclosing bank can't recover anything from the former home owner unless there was fraud or waste.
0 votes Thank Flag Link Thu Dec 2, 2010
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
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Some more to ponder & consult with the attorney about:
When the lender forecloses and sells the property the taxes will be made current so the property can be sold lein free, BUT will the lender be able to pursue collecting the portion of the unpaid taxes that were your obligation after the fact or sell that "debt" to a collector who may pursue it? and how much will that increase the costs? Again talk to the attorney.
0 votes Thank Flag Link Thu Dec 2, 2010
Zomboby,

I'll go all Zen on you by saying unless you are fortunate enough to be in a nonrecourse situation, your going to otherwise have to pay one way or the other. (Consult an attorney for best info on this). If you want to be fair and proper about it you can always calculate a per diem to your sale date and send that in for what you rightly owe... Just one idea.
Web Reference: http://bob2sell.com
0 votes Thank Flag Link Thu Dec 2, 2010
Technically, first installment property taxes are "due" on Nov 1st. There is a 40 day "grace period" that ends on Dec 10. Thus December 10th is the last day to get the tax payment in without a late penalty.

As others have said, unpaid taxes and penalties attach to the subject property. They are not usually considered to be your personal debt obligation.

The city and county will probably get an extra 10% more from the bank because of the late penalty, than they would get from you if you pay these taxes before the 10th. So the government will still get the money that it needs, eventually, for those taxes whether you pay them or not.

Same as everyone else: I am not a lawyer. Those are just my citizen opinions. NOT legal advice.
0 votes Thank Flag Link Thu Dec 2, 2010
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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I think this question is purely ethical. There is no reason to ask a tax or legal specialist. SOMEONE needs to pay the taxes and if you don't, the lender who is foreclosing on the property will need to pay them in order to sell the property. The taxes are due, by the homeowner who was afforded the privileges of the home during the previous 6 months. Can you? Will you? Should you?

So if you have lived in the property during the times that the taxes provided you service, do YOU feel you should pay your taxes?

We as realtors are not tax or legal experts, but we are your neighbors in the community. We are part of the community that is being affected as well. Each homeowner has to consider how they are affecting the rest of the community.

I expect that the reason for your attempted short sale and expected foreclosure is because of a hardship. I am sorry for your circumstances, but only YOU know whether, because of your non payment of your mortgage, you can pay the taxes as you exit the property.

I hope that 2011 is a much better year for you and that you find much to look forward to.
Web Reference: http://www.suearcher.com
0 votes Thank Flag Link Thu Dec 2, 2010
I do agree this is a question for your tax attorney. However, I do also feel the same as Terri Andrews that you did live in the house for that period of time. The state and county do deserve their money for those services such as schools, police and so on. It is a moral responsibility and civic duty.
0 votes Thank Flag Link Thu Dec 2, 2010
Your question is do I "have to" pay the property tax. The simple answer is no you do not. Should you is another question. There are many good answers already given below and everybody's situation is unique so you really should consult with a tax person and/or a real estate attorney. Who was representing you in the short sale? They should be your most valuable resource in finding out this answer and any others you may have related to your home. Were you represented by an agent? That is where I suggest you start. Good Luck.
0 votes Thank Flag Link Thu Dec 2, 2010
You pose an interesting question and of course I am going to recommend you consult an attorney & your financial advisor, but beyond the legal obligation, your question to me brings up one of civic responsibility. I am going to go out on a limb here and stir the pot a little, the property taxes you pay in Dec are to cover the period from this past July to Dec 31, time that you lived in the house, maybe you have kids too, so they went to school, you were served by the local police and fire, and so on. So to me it comes down to what is MY obligation to the community I live in? not so much as stick it to the lender........... just my thoughts and I have a feeling it may be in the back of your mind too or you wouldn't have asked the question.

Sorry to hear you are losing your home, wishing you and your family the best
0 votes Thank Flag Link Thu Dec 2, 2010
Zombody, the resounding answer you are being given below is that it's not logical to do so, but consult with your CPA and an attorney to make sure you are making the best decision for your specific situation.

Also remember mortgage loan payments, property taxes, insurance premiums, and monies spent on home maintenance are not entirely lost. Some of these payments are deductible on income tax returns. Another good reason to consult with your CPA.

As you are preparing for foreclosure, another item to consider is that lenders or their servicing agents are willing to pay “cash for keys” to obtain possession after the foreclosure sale has been conducted. Although lenders or their servicing agents are not required to make these payments, you have nothing to lose by asking for them.

My best to you as you move forward and look to brighter days and second chances my friend!
0 votes Thank Flag Link Thu Dec 2, 2010
In order to best protect yourself, consider consulting with an attorney who specializes in real estate--if you cannot afford one, contact the local Legal Aid Society for a pro bono attorney--free.
0 votes Thank Flag Link Thu Dec 2, 2010
I can tell you that unpaid taxes become a lien against the property, meaning the home can't be further encumbered without paying off the taxes. If taxes remain unpaid, they go to a tax sale. After four years, the home can be sold for the amount of the past due taxes.

But I can't tell you whether you should pay your property taxes because I can't give you legal or tax advice. I can tell you that among my clients, not one tax accountant has come up with a good reason for them to pay property taxes during a short sale, but that's not saying your accountant wouldn't have a different point of view.

Elizabeth Weintraub
Broker-Associate #00697006
Lyon Real Estate
0 votes Thank Flag Link Thu Dec 2, 2010
Hello Zombody. Frankly, you are very unique as most home owners facing foreclosure would not consider paying their property taxes. I certainly have never encountered a home owner who still wanted to pay property taxes after the bank declined. Let me ask you. What would be the benefit to you to pay this installment of the property taxes? Obviously, if you don['t pay, you can't deduct it from your taxes, but whether that would make a difference in your case, is a question your tax adviser. The other question is, what happens if you don't pay (aside from not getting the tax dedution). If you have already accepted that the property is going to foreclose and there is no chance that the foreclosure will be stopped, it really does not make any sense to pay the property tax. While it's been already due, you just don't incur a penalty if you pay by 12/10, paying the property tax will be the bank's responsibility if the property goes back to the bank or the new owner's obligation if a third party buys the property at the trustee sale. Property taxes are not personal obligations. They are secured by a lien on the property that stays attached to the property even after a foreclosure. Were you not able to short sell because the lender refused to approve the short sale or did you not receive any offers for your property? The way I see, unless there is a compelling reason for you to pay the taxes in 2010 (a reason other than the due date and avoiding penalty for late payment), I can't see an advantage to paying the property taxes at this juncture. If the trustee sale should be postponed and your short sale attempt continues, you can always pay the taxes later. Chances are, if the short sale should still be approved after all, the lender will most likely agree to pay the taxes, meaning that they won't ask you to come up with out-of-pocket because the taxes are still owed. Your 1099 for the debt forgiveness might be higher than it would be if the bank does not have to pay for the taxes, but whether that will make a difference for you is again a question for your tax adviser. I hope this helps.

Ute Ferdig
DRE # 01326917
Ferdig Real Estate Solutions
916-751-1267
0 votes Thank Flag Link Thu Dec 2, 2010
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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I'm not a lawyer and you won't be the owner when taxes are due.
0 votes Thank Flag Link Wed Dec 1, 2010
This is a question you should ask your accountant, as it depends on your financial situation. BTW, sometimes the auction date gets postponed.

Good luck to you.
0 votes Thank Flag Link Wed Dec 1, 2010
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