Property Tax Arrears Solutions & Savings

Property Tax Arrears Solutions

Property tax arrears solutions are just a phone call away, so don’t risk losing your home. Banks and credit unions are known for turning down applications where the borrower is in property tax arrears. There are still options available to you to clear up outstanding taxes and get things back on track.

It is important to note that your property is not eligible for a tax sale until at least the third year of arrears. Tax sales are conducted by public auction which means there’s a process to go through before a property can be listed for sale and sold on the market. 

Once the home is conditionally or unconditionally sold that means the chances of saving the home are slim. The power of sale method is traditionally used by many mortgage lenders.

A guide to your city taxes

The amount of taxes collected is based on:

  • the assessed value of your property
  • rate the municipality collects from your home
  • a portion of the residence that is taxable

While property taxes bring many ‘complimentary’ services to homeowners they are still a reoccurring expense that homeowners can easily neglect. Most cities offer a few benefits to homeowners such as snow removal, garbage pick-up weekly, and neighborhood-maintained playgrounds.

Past-due property taxes come with a higher price tag due to penalties and accrued interest. Late payment charges generally range from 1%-2% beginning the first day of default and will continue to accrue each month thereafter.  This could mean a total of 24% on top of your regular property tax bill for the calendar year. Tax rates can increase rapidly without notice.

Further to interest penalties should your taxes remain unpaid for 3 years or more you stand the risk of a tax registration lien.  If you receive a tax lien notice it means the home can be listed for sale by the city after the waiting period minimum of one year. It is important to note the city can sell the property for less than its current value.

Avoid losing your home to a property tax sale. Unpaid taxes are an important part of keeping your home. 

Solutions to pay property tax arrears

Our extensive experience will help you understand what your rights are when it comes to past due to property taxes. As a homeowner, we want to educate you on the many ways to save time and money. 

Before you scramble to try and come up with any money contact your respective municipality office to get confirmation of what you owe. They will gladly provide you with an updated balance and a letter confirming the same. During your conversation with the tax clerk, you should mention that you are working to arrange payment as fast as you can. This will at least make them aware of the fact you are working on a plan to get all caught up.

Once you’ve managed to get caught up you should ask the tax clerk if it’s possible to set up a pre-authorized monthly payment. This way the installments are debited from your bank account each month. 

If you have equity in your home, consider a mortgage refinance to clear up the taxes (municipal taxes) owed. Although most banks and credit unions will not refinance a large amount of tax arrears there are still options.


These methods are a better alternative than resorting to credit cards to catch up on your taxes. Remember most credit cards come with an interest rate that is higher than 12%. Carrying a balance on a credit card will lead to paying more interest than you need to. 

Property tax arrears for property owners

Once you’ve paid your property tax arrears in full the next step is to ensure it does not happen again. There are two great options that will help you budget. Having a budget and a plan to execute will ensure you avoid any further late payments.

  1. Direct Installment Plan – all municipalities will allow you to set up a payment plan with them directly. Any payments made are sent to the city right from your bank account. By doing this you avoid having to rely on your bank to make payments for you.
  2. Mortgage Lender Pays – if you currently have a mortgage with a bank, credit union, or traditional financial institution they will set up a tax component as part of your mortgage payment. The money will be part of your mortgage payment (weekly, biweekly, monthly, semi-monthly) and put aside in a tax account for payment at a later date.

Choosing one of the above methods to make your monthly property tax payments can save you thousands. You’ll never be in a position where you need to pay the city in one lump sum. The city or bank ends up collecting property taxes gradually for you in a savings account. 

If you own rental properties you need to consider your tenants. Try not to alarm tenants by falling into arrears. Your renters may turn against you and stop paying rent if there are serious signs of tax delinquency. Owners that pay their taxes on time will keep renters smiling. is a mortgage brokerage specializing in helping homeowners when traditional lenders won’t. We have a vast network of high-risk lenders that can help. If you’re behind on your property taxes we have a solution. 

If you’re in property tax arrears contact us at 1-855-242-7732 or apply online today.