What If You Can't Afford Property Taxes?

Local governments levy property taxes to raise funds for essential community services. If you own a home in the United States, you are assessed for property tax. For those homeowners who use all their income to pay basic living expenses, such as mortgage installments, heating and food, property taxes can be a struggle. There are programs in place to help those at risk of falling behind.

Homeowners who do not pay their property taxes face a range of penalties, including fines and liens. A lien is a matter of public record. Once in place, it puts potential buyers on notice of the tax default, effectively preventing the homeowner from selling his home. If the debt remains unpaid, the government agency may take possession of the homeowner's property and sell it by way of foreclosure.

Plans are generally available to help struggling homeowners with current or future tax payments. Some municipalities offer a hardship program, that exempts low income homeowners from some or all their property tax bills. While the application process varies among local governments, typically the homeowner must prove financial hardship to gain full or partial exemption, or an extension to the time limit for paying tax to avoid penalty and foreclosure. Some areas only consider homeowners with a household income at or below the poverty line.

Different programs help homeowners pay past due taxes. In San Francisco, delinquent homeowners may open an installment plan with the treasurer's office that allows them to spread back payments over a five-year period. The Michigan not-for-profit organization Step Forward has federal funding to pay up to $30,000 in delinquent property taxes directly to the eligible homeowner's local county treasurer. Some states also have special programs for seniors who cannot pay their property taxes. You can find out about local initiatives from your local tax office.

Homeowners who do not qualify for abatement can ask their bank for a low interest personal loan. The bank will check the borrower's credit history and his ability to repay the loan. Some lenders specialize in property tax loans to help those homeowners at urgent risk of losing their home to foreclosure. These lenders clear the delinquent debt and associated costs, but typically require a lien on the house. As a lien-holder, the lender could itself foreclose if the debt is not repaid. The Better Business Bureau recommends such lenders only as a last resort, as they defer rather than remove the threat of foreclosure.