Understanding Property Back Taxes: Causes, Consequences & Solutions

The Latest on Property Taxes

• Legal Victories: A Nebraska homeowner recently recovered his property after a six-year legal battle over $588 in unpaid property taxes, highlighting the severe consequences of even small tax debts.
• Florida’s Property Tax Reform: In 2025, Florida continues implementing property tax relief measures for homestead owners, with average savings of $1,200 annually for qualifying homeowners.
• Home Equity at Historic Levels: As of 2025, American homeowners’ equity has reached $42 trillion, resulting in property tax increases averaging 4.1% nationwide compared to 2024.

What if you wake up one day and realize you are no longer the property owner? This can happen if you have unpaid property taxes.

Property back taxes can sneak up on anyone. You missed a due date. You ignore a mail notice. Suddenly, your home is at risk. You might not even realize you owe property back taxes until you get a notice, or worse, face penalties or risk losing your property. But the good news is you have options.

In this blog, we’ll explain what property back taxes are, why they happen, what risks they carry, and, most importantly, how to fix them before they get worse.

What Are Property Back Taxes?

So, if you owe $800 this year and don’t pay it, you’ll owe more next year. And if you still don’t pay, the government may take action, like placing a property tax lien on your home.

But why do people fall behind in the first place?

Causes of Property Back Taxes

There are a few common reasons:

• Financial hardship: You might find yourself unable to afford your tax bills.
• Confusion over deadlines: Missed payments because you didn’t know when they were due.
• Escrow mismanagement: You often pay property taxes through an escrow account handled by your mortgage lender. Lenders may incorrectly calculate amounts, leading to unpaid taxes. 
• Property disputes: If you’re involved in a dispute over property ownership, taxes might go unpaid during the conflict.
• Lack of awareness: Some people don’t realize they owe taxes, especially if they inherited or bought the property at auction.

No matter the reason, the outcome is the same: unpaid property taxes start building up.

Consequences of Unpaid Property Taxes

Ignoring your property back taxes can lead to big problems. Here’s what could happen:

1. Accrued Penalties and Interest

Once the payment is late, penalties and interest are added. And these aren’t small fees. They stack up every month. Most local governments add interest and late penalties to your unpaid property taxes. Over time, this can double or triple the original amount you owed.

2. Tax Liens and Property Sales

A property tax lien is like a red flag on your home. It tells the world that you owe money to the government. Until you pay it off, you usually can’t sell or refinance the property.

If the tax stays unpaid for too long, the government places a property tax lien on your home. This legal claim says you must pay your taxes before selling the house.

If you ignore the lien, the government may move to seize the property or sell it at a tax deed auction.

Also Read → Liens on Property Search: A Comprehensive Guide to Removing Liens from Your House

3. Credit Score Impact

Although local tax debts don’t always appear on credit reports, if the property tax lien gets handed to a collection agency, it may damage your credit history.

A lower credit score can hurt your ability to:

• Get a loan or mortgage
• Buy another home
• Lease an apartment
• Open a credit card
• Affects your finances for years

That’s a high price to pay for missing a tax payment.

4. Tax Sale or Foreclosure 

If property back taxes are unpaid, the government can opt for a Tax Sale. 

The property will be sold at auction. Losing ownership rights can also lead to foreclosure. 

Bonus Read → Ultimate Guide: Removing and Avoiding Tax Liens on Your Property

How to Check If You Owe Property Back Taxes?

Want to know if you owe back taxes? Here are three ways:

1. Contact Local Tax Authorities

Every city or county has a tax department. You can call or visit them to ask about your property. Give them your property address or ID number, and they’ll collect your records.

Ask for a full record of your tax payments. They’ll tell you how much you owe and if any penalties were added.

2. Use Online Portals

Many local governments offer online tax portals. These websites allow you to look up your property by address or tax ID number.

These online portals will detail outstanding tax amounts, payment history, penalties, and interest paid.

Not all areas have this, so check with your local office first.

3. Perform a Title Search

A title search checks if there are any liens on the property, including tax liens or legal claims on the property. You can hire a title company or a real estate attorney to do this.

For this, you can: 

• Go to the county recorder’s office for a title search
• You can also hire a title company and get a proper report
• You can also use online title search services

It’s a smart move if you’re buying a property and want to make sure it’s clear of any debt.

How to Resolve Property Back Taxes?

So, let’s say you checked and found out you owe money. What now?

Here’s how to start resolving back taxes:

1. Create a Payment Plan

Many cities and counties allow you to set up property tax payment plans, such as an installment agreement or an Offer in compromise. This means you can pay what you owe over several months instead of all at once.

Ask your local tax office if they offer:

• Monthly payment options
• Installment agreements
• Deferred payment plans
• Payment extensions

You spread the debt over months, making it manageable. Contact your local office to set one up.

But don’t miss a payment. If you do, you may lose the plan and face higher penalties.

2. Request an Offer in Compromise

An Offer in Compromise (OIC) lets you settle your tax debt for less than the full amount you owe. You agree to pay a smaller amount, and the government forgives the rest. It may be a valid option if you can’t pay your full tax liability or if doing so would create a financial hardship. 

To qualify, you must:

• Show proof of hardship
• Be honest about your income and debts
• Make a fair offer

Not all requests are accepted. You must show proof of hardship, like job loss or disability. But it’s worth a try—especially if you have no other way to pay.

Know More → How to File Form 656 to Apply for an Offer in Compromise?

3. Apply for a Property Tax Exemption

You may qualify for property tax relief or exemption programs, such as:

• Senior citizen exemptions
• Veteran exemptions
• Disability exemptions
• Low-income household exemptions
• Homestead exemptions

These programs can:

• Lower your yearly tax bill
• Reduce back taxes owed
• Pause tax collections (temporarily)

Check with your local tax assessor’s office for eligibility.

4. Redeem the Property (if it’s in the tax sale stage)

If your home has already been sold in a tax sale, you might still have a chance to get it back by paying:

• The full amount of back taxes
• Plus interest (averaging 12% in 2025), penalties, and any costs.

This is called the “right of redemption.” The redemption period varies by state. 

For example, residential property owners typically have →

• 2½ years in some counties like Lake County, Illinois
• 2 years for homestead properties in Texas
• As little as 6 months in some states

5. Appeal Your Property Assessment

Sometimes, your taxes are high because your property was overvalued. If you believe the value listed is too high:

• File an assessment appeal
• Provide proof (like recent sales of similar homes)
• Ask for a reassessment or correction

If successful, this can lower both current and past taxes.

6. Seek Professional Help

Some tax situations are too complex to handle on your own, and complex debts need expert eyes. That’s where professionals come in.

A tax attorney can talk to the authorities on your behalf. A financial advisor can help you plan how to pay what you owe without hurting your daily life.

A tax attorney, CPA, or financial advisor can help:

• Dispute errors in your tax bill
• Settle unpaid taxes
• Protect your property from tax foreclosure

This help may cost money. But it could save your home.

Need Help? → Let Us Save Your Property. Schedule a FREE Consultation Call

Compare Your Resolution Options: Choose the Right Solution for Your Property Back Taxes 

Whether you’re dealing with a short-term setback or long-term hardship, the table below helps you find the one that best matches your financial situation and property status. 

Preventing Future Back Tax Issues

Unpaid property back taxes can get you into penalties and even lead to a lien on your property in the future. To avoid this, it’s better that you pay the taxes on time. 

Here is how you can prevent future back tax issues: 

1. Automate Tax Payments

Set up automatic payments through your bank or the tax office. You won’t forget, and you’ll avoid penalties.

If your mortgage includes an escrow account, your lender may already do this for you.

2. Stay Updated

Tax rates can go up without warning. Stay updated on local tax policies by checking your city or county’s website.

Some places add new fees, like the vacant land tax in Victoria, that catch people off guard.

Make sure you:

• Check your local government website
• Read the annual tax notices
• Know the due dates

Even small increases can surprise you if you’re not prepared.

3. Use an Escrow Account

If you pay a mortgage, your lender may include property taxes in your monthly payment. This is called an escrow account. This means part of your monthly payment goes toward taxes.

The lender collects money from you, saves it, and pays the taxes when they’re due.

It’s one less thing to remember and a smart way to avoid late fees.

Tax Lien Properties

Some investors buy homes that have property tax liens on them. These are called tax lien properties.

When someone buys a tax lien, they pay the unpaid taxes for you. Then, you owe them instead of the government, often with high interest.

If you don’t repay them with interest, they can claim the property.

Property Tax Liens in Florida

Florida is known for having one of the country’s largest tax lien certificate markets.

If you don’t pay, the state quickly places a lien. Ignore it too long, and they auction your home. This system makes it risky for Florida homeowners who fall behind.  In 2024, Florida saw a spike in these sales. So, if you live in Florida, never ignore your unpaid property taxes.

Know More → How to Buy Tax Lien Properties in Florida: A Complete Guide

Legal Help for Property Back Taxes

Now that you understand your options, you might wonder when to handle tax issues yourself and when to seek professional help. Sometimes, tax debt becomes too complex or substantial to manage alone. That’s when legal help becomes invaluable.

Here’s what a tax attorney or legal team can do for you:

• Dispute a tax lien: If you believe the lien is incorrect or improperly filed, a tax attorney can challenge it using their knowledge of tax law and procedural requirements.
• Negotiate payment solutions: They can negotiate with tax authorities to create payment plans with more favorable terms than you might secure on your own.
• Prevent foreclosure: In many cases, they can delay or stop a tax foreclosure by filing appropriate legal motions or negotiating settlements.
• Provide expert tax advice: Tax attorneys stay current on tax legislation and can advise you on the most advantageous way to resolve your specific situation.
• Draft and review legal documents: They ensure all paperwork is properly completed and filed, preventing costly mistakes that could worsen your situation.

Not every case requires legal representation. For simple payment plans or small amounts, you may handle it yourself. However, if your home is at risk, you face substantial penalties, or your case involves complex legal issues, professional legal help could save your property and potentially thousands of dollars.

Don’t Neglect Property Back Taxes; Let Salinger Tax Consultants Help

If you’ve read this far, one thing is clear: ignoring property back taxes is not an option. They don’t go away. They grow. And they can take away your home.

But the good news is you can fix it. That is where Salinger Tax Consultants comes in. We are a leading tax resolution specialist in the USA. Our expert team will look at your situation and help you the best in resolving property back tax concerns.

Don’t let unpaid property back taxes put your home or peace of mind at risk—let us take the weight off your shoulders. Contact Us Now!