How long can property taxes go unpaid?

Q: My mom died several years ago. Do I need to pay her past due real estate property tax bills? How long can property taxes go unpaid? Also, do I need to pay her income tax bills as well? Her accountant filed her income taxes after her death and now I have a bill for $200. Am I now liable for the debts of her estate? We are in the process of selling her home. Thank you in advance.

Don’t let property taxes go unpaid for too long

A: The quick answer is that you will need to settle up with the local taxing authority for any real estate taxes that may be owed on your mom’s home. Any buyer looking to purchase the home will want to make sure that any bills associated with the home are current and paid.

While you could wait to pay the real estate taxes at the time you actually close on the sale of the home, you should know that the local municipality may charge you a penalty, late fees and interest on any unpaid real estate tax bills. We’d suggest you find out what taxes are due on your mother’s home and make sure you understand what it’s going to cost you by holding off paying those taxes until the sale.

Unpaid property taxes mean you could lose the house

One more important thing about real estate taxes: if those taxes have not been paid for some time, you risk losing the house to a tax buyer. If that happens, you could lose the entire value of the home as a result of the unpaid taxes.

Recently, the Supreme Court ruled that a local municipality can’t sell off a home to satisfy a debt to the municipality and also keep money above and beyond what was owed. But it doesn’t work that same way when it comes to unpaid real estate taxes. The local municipality may sell the home for the amount of the unpaid real estate taxes, and the tax buyer who eventually gets the house could then sell the home and keep all profit. The original owner would get nothing.

So please be careful and make sure the real estate taxes are paid now, or soon.

Pay your property taxes soon

On the question of the income taxes owed on your mom’s estate, consider:

  • Talk to the estate’s tax preparer to know exactly what is owed to the Internal Revenue Service.
  • The settlement agent may want to know that all debts of the estate have been paid off before allowing the sale to close.
  • Funds from the sale of the home may be used to pay off the debt owed to the IRS.
  • They may also be used to pay off any other debts that your mom may have had.

We don’t think you have any personal obligation to repay your mom’s debts. But if you are inheriting property from your mom, your mom’s estate’s representative may have the obligation to settle those debts before giving any remaining funds to you. In the end, it may be the same result — you inherit her assets but the debts get paid off.

©2023 by Ilyce Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency.


Read more about real estate property taxes:

Deducting Real Estate Taxes

Does Paying Property Taxes Give Ownership?

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