Property taxes often can sneak up on small business owners. The consequences of forgetting or not paying property taxes can be serious, such as late fees, interest and even foreclosure proceedings.
Some ways you can better manage your property taxes:
- Budget and plan – Know when your taxes are due and the amount owed. Property taxes are typically due the same date each year. Setting aside money each month for taxes is one way to ensure the money is there on the due date.
- Confirm your taxes were paid – Even if you have an impound account with your bank you should check to be sure property taxes were paid. Most counties have websites where you can confirm your taxes have been paid.
- Appeal your assessed value – With the decrease in real estate values the last two years, you may be paying more than you need to. Many county assessor offices have a routine process to confirm the assessed value of your property. Check with them for more information.
- Get on a tax plan – Many counties provide ways to help property owners get current with property taxes. For example, in California you can pay 20% of your outstanding balance and the remaining portion over five years. The down side is that the high interest of 18% a year continues on past-due taxes and your current property taxes must be paid in full and on time or you are dropped from the plan.
Any creditor that comes with an 18% annual interest rate and has the authority to take your property has to be given your highest priority. This underscores the importance of paying property taxes when due or, if past due, getting on a payment plan. Failure to do so could have dire consequences including loss of your property through a tax sale.This week’s blog contribution was written by Jerry Holden, a Credit Analyst at CDC Small Business Finance. Thanks Jerry!