Property Taxes Are Probably Still Due Despite Coronavirus

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Everyone has three extra months to pay federal income taxes because of the financial pain caused by the coronavirus pandemic. But what about the real estate taxes on your home? Any flexibility on paying those?

Maybe. It depends on where you live, since property tax payments are governed by a patchwork of state and local rules.

Extra time to pay could help people struggling with furloughs or layoffs. The average property tax bill on a single-family home in 2019 was about $3,600, but average bills are three to five times higher in some areas of the country, including parts of New York, New Jersey and California, according to Attom Data Solutions, which tracks property trends.

It’s generally harder for local governments to postpone tax payments because they rely on the money — usually paid in lump sums once or twice a year — to finance essential services. And while the federal government has vast financing power, counties, cities and towns have limited reserves of cash and credit to fill budget gaps.

Cities and towns rely on property taxes to fund the very services that are heavily strained because of the virus, said Christiana McFarland, research director for the National League of Cities. “It’s a huge hit on their budgets,” she said.

Some governments have extended spring property tax deadlines by as much as a month because of the economic dislocations caused by the virus. Others are effectively providing extensions to people who need more time by waiving penalties for late payments.

“We’re seeing a wide range of responses,” said Teryn Zmuda, chief economist with the National Association of Counties.

The extensions help people who pay their property taxes directly. People whose property taxes are included in their monthly mortgage payment don’t benefit because the money is already collected in an escrow account. (People struggling with mortgage payments should contact their bank or loan servicer. Relief has been granted for federally backed mortgages and some other home loans.)

Fewer than half of the homeowners in the United States paid their property taxes with their mortgages in 2015, according to a report in 2018 by the Lincoln Institute of Land Policy. The majority either didn’t have a mortgage or had one that didn’t put their property taxes in escrow accounts. (The share of people paying property taxes through escrow accounts varied widely by state.)

Older people are much more likely to pay their property taxes directly; just 20 percent of homeowners 65 and older had escrow accounts, the report found.

In many areas, homeowners are still expected to make property tax payments by the usual deadlines despite the economic strain caused by the virus. For a variety of reasons, “it is more difficult to change property tax filing dates than to change income tax dates,” said Jared Walczak, director of state tax policy at the Tax Foundation, a nonprofit organization focused on tax policy.

Local governments, typically counties or cities, set property tax rates and collect the money. But payment deadlines are often dictated by state law, and changing them may require an act of the legislature — many of which are now in recess — or an executive order.

Property taxes are used to pay for public schools, public health and emergency services, trash pickup, water and sewer operations, road maintenance and libraries. More than two-thirds of counties rely on property taxes for more than one-quarter of their revenue, Ms. Zmuda said. And during the coronavirus crisis, she said, counties are funding increased public health services, spending far beyond what they budgeted.

Postponing receipt of property taxes can cause havoc with local budgets, Mr. Walczak said. Unlike income taxes, which are collected over time through regular payroll deductions and estimated tax payments, property taxes are typically paid all at once or perhaps in a few installments.

Officials are struggling to find a balance between their needs and residents’ newly straitened circumstances. A group of county and tax officials in California urged the state to stick to an April 10 property tax deadline. Allowing all homeowners and businesses more time to pay, they said, “will tip local governments into insolvency at a time when our residents need us the most.”

Counties, the group said, “will use all existing authority” to cancel penalties for homeowners and small businesses affected by coronavirus “on a case-by-case basis.”

In a statement on Saturday, Gov. Gavin Newsom of California praised the counties’ “commitment” to cancel penalties because of “demonstrated economic hardship” caused by the virus. “This is good news for Californians,” he said.

A spokesman for Mr. Newsom said on Thursday that his office was “looking into further actions as well.”

Taxpayer and business groups have urged the governor to extend the deadline by 90 days, arguing that applying for waivers is burdensome, and that counties may grant them inconsistently.

Florida has extended property tax deadlines statewide about two weeks, to April 15 from March 31, because of the virus. King County in Washington State, which includes Seattle, a city hit hard by the virus, has postponed its spring deadline by a month, to June 1. West Virginia approved a statewide one-month extension to May 1. San Francisco has moved its deadline from early April to May 4, when it expects a stay-at-home order to be lifted.

Some New York state and county officials have asked Gov. Andrew M. Cuomo to postpone May property tax deadlines. A request for comment sent to the New York governor’s office was forwarded to the State Division of the Budget. A division spokesman, Freeman Klopott, said Wednesday that the state was “open to discussing adjustments to those dates at the request of the impacted local taxing jurisdictions.”

New York City follows a different payment schedule. In a transcript of remarks on March 22, Mayor Bill de Blasio suggested that the city was unlikely to extend an April 15 city tax payment deadline for some homeowners, given “skyrocketing” expenses and “plummeting” revenue because of the coronavirus crisis. But he added, “We’re going to look at everything.”

Here are some questions and answers about paying property taxes:

What happens if I don’t pay my property taxes?

Failure to pay your property taxes can lead to financial headaches like penalties and interest and, eventually, more serious problems like a lien on your home. Local governments may auction delinquent properties to collect back taxes, or sell the liens to companies that, in turn, may foreclose. Some areas, however, have temporarily halted tax lien sales because of the coronavirus outbreak.

Are there programs that can help me if I can’t pay?

Even before the virus, most tax authorities offered programs that reduced property taxes for low-income, disabled or elderly people and veterans. Some also offer those suffering financial hardship the option to defer payment or arrange an installment plan.

“There’s a lot of variation in how flexible taxing authorities are,” said Sarah Bolling Mancini, a lawyer with the National Consumer Law Center.

To find out whether your local government has postponed payment deadlines, or for instructions on how to request a deferred payment or payment plan, contact your local tax collector or tax commissioner’s office. Some offices may be closed because of the virus, so it’s best to start by checking the agency’s website.

Can I challenge the assessment on which my property tax bill is based?

Yes, but usually you must do this well before the tax bill comes due. Most communities send property owners assessments months before bills are issued and set a deadline for appeals. If it is too late to appeal the assessment used to calculate your current tax bill, you can plan to challenge the assessment for next year.

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