I received a property tax bill after selling the house, now what? What happens when real estate taxes are still in the seller’s name years after closing?
Q: I owned a house for six years and then sold it. It appears the new owners never put the home in their names. Three years later I found out that the taxes on the home have not been paid during those years. The taxes are still in my name. If I pay the taxes, to keep them from being a problem on the home I now own, how do I go about regaining ownership of my old home? I have tried for months to get the new owners to make arrangements to pay the taxes but to no avail.
I Received a Property Tax Bill After Selling the House, Now What?
A: We must start with the question of whether the home you sold is in your name or the name of the buyers. We’re pretty sure that if you closed through a title company, settlement agent or closing attorney, the home is now in the buyers’ names. At that closing you would have delivered certain documents and one of those documents would have conveyed your interest to the buyers.
It’s more likely that the home is now in the buyers’ names but the local office that collects real estate taxes has not updated the taxpayer name in their records. In most jurisdictions, the real estate tax obligation goes with the owner of the property and does not follow that owner after the owner sells the home.
Think of it this way, if you have a credit card and make charges on that credit card, those charges are your personal obligation to pay. If you move, change jobs or take out new debt, you continue to be liable for the payment on that credit card. The credit card company can sue you wherever you are for payment.
More often than not, real estate taxes owed are the responsibility of the homeowner. When you buy a home, you must pay the real estate taxes on that home. If you sell the home and have not paid the real estate taxes, the buyer of your home would then become liable to pay those unpaid real estate taxes.
What Happens When Real Estate Taxes Are Still in the Seller’s Name Years After Closing?
Local real estate tax offices don’t want to chase after delinquent homeowners for unpaid real estate taxes. Those taxing bodies only need to go after the property. When a homeowner fails to pay real estate taxes, the unpaid taxes become a lien on the property. As a lien on the property, the taxing authorities can sell off the rights to collect on the amount owed and the tax buyer can, after a certain amount of time, become the owner of the property. We’re simplifying how the process actually works, but if the homeowner doesn’t pay his real estate taxes, then the taxing authority sells those taxes and the tax buyer brings the taxes to current. If the homeowner still doesn’t pay the amount owed with interest and penalties after a set time (to reimburse the tax buyer for the amount of the unpaid taxes plus interest), then that tax buyer can get the deed to the home and becomes the new owner of the home.
Of course, there are times that no tax buyer steps forward to buy the taxes on a particular home. This is typically because the amount of the taxes owed exceeds the value of the property. In this situation, the local municipality can eventually take over ownership of the property due to unpaid taxes.
Having said all that, you should check with the tax collector’s office where your old home was located, and find out what the process needs to be to have the tax bill put into the name of your buyers. It may simply be that the buyers forgot to put in a change of name and address form with them. You might be able to put that form in and then move on.
For any other situation relating to your real estate taxes, you’d probably want to talk to a real estate attorney and see if there are other circumstances that surround your situation that could lead to a different outcome.
More on Property Taxes, Selling a Home and Buying a Home
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How Are Property Taxes Calculated?
What Happens to My Property Taxes When I Pay Off My Mortgage?
Will Adding Child to Title Increase Property Taxes?
When No One in the Family Wants to Pay Property Taxes, What Can You Do?
Home Titles and Property Taxes: What You Need to Know
How To Save Money on Your Property Taxes When Moving Within the Same State
The 2 properties dad owned were sold last OCT in California.
The new owner of both properties is responsible now so why is my deceased Father getting a bill here?
He paid taxes in full for the year, then taxes were charged to the estate at closing.
Is a REFUND due for the trust set up?
PLEASE let me know. We don’t want any extra confusion after his death on June 25, 2020.
The Paradise fire essentially killed him.
How sad was his last year!
It is apparent here in Florida that in order for a property tax to be collected, there must be in the public record a recorded property deed. When a property owner sells his property to a new owner, he must check with clerk of court to make aware that owner has transferred property and will no longer be required to have a tax bill. It is up to new owner to record deed and if he doesn’t the county has no name and address to send tax bill. Florida does not require a property deed to be recorded. The recording of a property deed into the public record provides county taxed services, making the owner a privileged taxpayer.
According to the Florida Dept of Revenue, if you own real property, it will be assessed annually by the county property appraiser. The assessment determines the taxes owed and that amount will then be collected by the county tax collector. If this is your primary residence, you could get an exemption of up to $50,000 from the assessed value. This is known as a homestead exemption. It also contains a cap on how much the assessment can be increased year to year. Other exemption are available for widows/widowers, bling people, permanently disabled people, seniors and veterans. You can call the Florida TAx Payer Services hotline at 850-488-6800 or go to floridarevenue.com.
According to FloridaRevenue.com, “Deeds are taxable whether recorded or not. If a deed is not recorded by the 20th day following the month of delivery, the tax must be remitted to the Department as an unrecorded document.”
And this: “Deeds and other documents that transfer an interest in Florida real property are subject to documentary stamp tax. Regardless of where the deed or other document is signed and delivered, documentary stamp tax is due. The amount of tax due is computed based on the consideration for the transfer. All parties to the document are liable for the tax regardless of which party agrees to pay the tax. If a party is exempt, the tax must be paid by a non-exempt party.” Reference: Section 201.02(1)(a), Florida Statutes
Here’s the link for more information: https://floridarevenue.com/taxes/taxesfees/pages/doc_stamp.aspx#:~:text=Deeds%20are%20taxable%20whether%20recorded,Department%20as%20an%20unrecorded%20document.