A question to land owners

If you bought or inherited land, say $100,000 worth, and you pay it off, but do not pay property taxes in the future years, who takes it and do you get your $100,000 back? Do you get anything back?

In Colorado you have 3 years to not pay property taxes and after that the property can be acquired via tax lien. The way it works is as follows:

1. You don't pay your property taxes.
2. The county auctions off your property taxes to joe schmo
3. The next year you don't pay your property taxes.
4. Joe schmo has first right of refusal on your property taxes so he pays them.
5. The third year you don't pay your property taxes.
6. Joe shmo has the first right of refusal on your property taxes so he payes them.
7. Joe schmo files a tax lien on your property
8. 90 days later, Joe schmo owns your land.
9. Sheriff evicts you from the land.

If you pay your taxes in arrears, you are charged prime + 7% interest on the amount with the person who bought your taxes at auction, being the one who get's their principle back plus the prime + 7% which is tax free.

Oh, so it's different from state to state?

What about compensation? IF you own $100,000 of property, will you get any of it back? Do you loose it only after you are behind on property taxes by $100,000?

It sounds like one can get land dirt cheap just by paying someone elses delinquent property taxes?

Sounds pretty bad.

Originally posted by godservant
Oh, so it's different from state to state?

It sounds like one can get land dirt cheap just by paying someone elses delinquent property taxes?

Sounds pretty bad.

I think the way the state looks at it; is if you own land in a particular local the taxes go to fix roads, schools etc. and if you don't contribute to the infrastructure of the county or state, you forfiet your intrest in the property even if you hold the deed.

Yep, you can buy land, property, almost anything for back taxes if you know how. Tax auctions are usually posted in the local newspapers and now you can find delinquent stuff all over the web.

I don't know if this is a BAD thing; just reality. Knowledge is power; schools out. Nothing is certain but death and TAXES.

[edit on 10-10-2005 by whaaa]

Originally posted by godservant
It sounds like one can get land dirt cheap just by paying someone elses delinquent property taxes?

Sounds pretty bad.

Well, if a person doesn't pay his property taxes, he has no one else to blame.
I know when we moved to a new city, we had to go to the City Clerk to sign up/register to be able to claim Property Tax on our State Income Tax.
I didn't read the fine print, but it probably says you just agreed to pay those taxes. And you are subject to penalities for non-payment. The city does does what it needs to co to collect those taxes.

I think it's sad that people try to ignore the tax obligations of their property investments.
Not saying the system is fair, mind you

The county can also put your property up for sale to pay the owed taxes after a specified period of time.

The way it works here, if I understand it......

1. You don't pay taxes for three years.
2. After final warning, land is auctioned off at the courthouse.
3. Anyone can bid including yourself (assuming you can get financing).
4. The amount of the winning bid is applied to the back taxes.
5. Anything left goes to the old owner.
6. Any financing against the original deed is still the responsibility of the original owner.

Here in Pennsylvamia, and in my city, I have 5 taxes to pay.
Real Estate - $300 /year
School- $1, 750/year
City- $375/year
Residence- varies
County- varies

It's late-it's something like that.

Fun, eh?

Out of those, if you don't pay them, they can nab you in two years. Right now, I am paying off my back taxes through my lawyer. And if I would stop paying, they will have my house up for sale in no less than 28 days, and sell it for no less than what I owe taxes for. You pay $100,000 for a house, you might as well just pay the dang tax. If you don't pay and you owe $3,000, that's what they would auction the house for. It isn't worth losing your investment. And yes, you would lose it ALL.

Keep in mind if you are looking to pick up property cheap for back taxes, there is usually a good reason that some one has let it go.

That reminds me of a story. A few years back, someone picked up a house for back taxes. When they went to check out the property, they found the previous owner sitting in the living room chair, where he had been for the last three years, dead.

While the "get rich quick" stories you see on informercials are pretty bogus, you CAN make money by very judiciously buying tax liens. However, you HAVE to know your area, be very educated in investments, AND have enough capital to put up front. We've been doing this for years, but we have never had to foreclose. The lien has always paid off...and that's why we are in the business...because you can get from 8-12% on your investment. Assignments can go as high as 16% (those are the liens that don't sell at auction).
Every state handles this differently.
Personally, we have our private code of ethics about what kinds of liens we will buy....big corporations, yes, large office buildings, yes, huge mansions, yes, some poor "joe schmoe" that's a couple of years behind in taxes...no..
joey

Hi, been a year or two since I last posted, where did all my points go?
Any ways I've been researching this topic for a while and have discovered some bizarre practices going on by members of the Monatana free men & the posse along with tax protesters & militia groups.

Any ways it seems that if an individual files a common law lein against his /her own property for the value they already paid/invested plus roughly $3000-$5000.00 per year of living on the land/in the dwelling for life experience (memories, children growning up, marriage, etc.), they must be given this amount of money/value/equity before any property can be siezed.

For example: If you buy a house/land for 100,000 dollars with a mortgage, put $25,000 down plus have spent roughly $10,000 after intrest against the principal and have lived on the property for say 'five years'. You can legally file a common law lien against yourself for $60,000 dollars. This common law lien must be paid to you before any property can be siezed for failure to pay taxes. All liens must be paid in order of which they were filed, therefore the gov't, municpality, province/state must sell your land/property for your lein amount plus what ever tax amount owed. If this amount become higher than it's fair market value, it becomes to costly to sieze and 'they' will essentially leave you alone. This action will how ever destroy your credit rating and prevent you from borrowing money for seven years. You also can waive the lien against your self at any time for a very small filing fee. This is completely legal and most people are un aware of this practice. This is the same legal process the gov't/bank does against you in order to sieze your property in the first place therefore "they" can't pass a law to change it.

P.S. you can also include any home improvement into the common law lien like remodeling of the kitchen or bathroom.
Essentially if you own the land/house and have made considerable improvements while living in/on the property for a long time your common law lein can become so expensive that 'they' can't expect to ever recover past tax defaults because 'they coudn't ever find a willing buyer that could afford to pay your common law lien and past tax amounts thus you really can eventually own your property for life, unless Hollywood/wealthy CEO's etc. move into the area and drives up propery value for insane prices.

[edit on 19-11-2005 by BattleofBatoche]

[edit on 19-11-2005 by BattleofBatoche]