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Small Effect on Property Taxes by Fall of Home Prices

When the value of their homes fell drastically, quite a number of homeowners were caught by surprise. It seemed as though there could be an advantage in the big decrease in home prices. With the lower value of their homes, many believed that their property taxes would come down also. For a lot of places, this just did not happen, though.

There was quite a bit of shock among many homeowners when they found that their property taxes not only didn't come down but went up instead. Astounded homeowners were left wondering why their taxes went up when their homes were valued a lot less than they were a year or so ago.

The complicated way property taxes are figured in many counties is the reason for this surprising increase. Increases in property taxes were capped during a boom in housing and this was especially true in Nevada. This created a problem as the value of homes rose very fast during this time.

The home values in these places are dropping now, but the lower values are enough for the rapid rise of the last few years to be compensated for. As a result, home values would have to fall even further and very quickly in a short time before property taxes began to go down. Even though the drop in home values is a problem, they have not fallen enough for homeowners to see lower property taxes.

The number of foreclosures and defaulted loans keeps climbing in a lot of places and many counties are finding that the number of unpaid property taxes is climbing as well.

One place that is having property taxes go unpaid in record numbers is the metro Detroit area. Because of the rising number of foreclosures and falling home prices, Detroit is said to be one of the worst housing markets in the country.

The housing market crashing in Detroit is believed to be mostly caused by an economy and job market that are both weak.

Homeowners can still have their homes foreclosed on even if they are keeping up with their mortgage payments every month if they miss paying the property taxes for three straight years. Once the county forecloses on a home, it is auctioned to pay the back taxes. Large numbers of unpaid taxes have resulted in counties around the Detroit area to have problems trying to get many millions of dollars in back taxes paid. This has caused serious problems for the Detroit metro area.

There are things that homeowners can do to prevent or delay foreclosure from getting too far behind in paying property taxes. Beginning to pay on the taxes is the first thing to do. A lot of people think that they have to pay the full amount in taxes all at once if they get behind so they don't pay anything. Even if you can't pay the full amount, paying a small amount is better than not paying at all.

If you can't pay the whole amount of taxes you owe, work on paying the oldest taxes to start with. Keep in mind that it is going three years in a row without paying property taxes that will result in foreclosure. If you can get the oldest taxes paid, the chances of foreclosure are reduced.

It would also be a good idea to see if your county could give you an extension on your unpaid taxes. If you can prove that you are under serious hardship, the county treasurer might be able to give you a tax exemption. Since there are often deadlines for applying for an exemption, this should be done as soon as possible before the deadline is passed.

Also, talk to the company or bank that your mortgage is through to see if they have a program of some kind you can get the money you need to pay your taxes. If the county takes your home, the bank will lose money, so they have an interest in helping to keep that from happening. They will often work with homeowners to keep their homes from being foreclosed on for property taxes. Remember, though, that this will mean you will have higher mortgage payments or a second mortgage on your home, resulting in higher monthly payments.