Hi Ericâ€¦This is a great conversation to have with the real estate agent helping you with your short sale. Unfortunately this (as in the Trulia forum) may not be the best place to receive a specific answer to your questionâ€¦but it is a great source of feedback which can provide you with some really good insights into your upcoming short sale.
Speaking from experience with multiple short sales transactions, as well as from extended short sale based training (CDPE & SFR), paying or not paying your property taxes is NOT likely to be the determining factor of successfully completing your short sale. But, If you decide not to pay your property taxes then possible ramifications could be increased penalties and late fees charged by the tax collector which are then added to your total debt owed your lender(s).
The Santa Clara County tax assessor's ofice will notify your lender and you will most likely be contacted by them demanding payment of the outstanding balance. How you handle the situation when it arises is between you and your listing agent and/or real estate attorney.
When selling a property subject to an HOA, more important that staying current on property taxes is staying current on HOA dues...both for the ease of negotiating a short payoff with your lenders as well as helping the HOA's delinquncy rate so that prospective buyers will be able to qualify for purchase financing.
I hope this helps...feel free to contact me for further details.
So be sure to fully discuss your options and qualifications for a short sale before you skip your payment.