So you got a Property Tax Bill…

As we draw near the end of the year, taxing authorities start drumming up their rolls and the presses start processing property tax bills. Given the sheer volume of properties, as well as the turnover in ownership, it’s likely that you might have received a bill when you didn’t expect one – so the question is: what do I do with this official piece of paper? You’ll love the answer – it depends.

For the sake of level-setting and before we deep-dive into the answer, when you buy a property, the seller pays property taxes up to the last day they own it. This payment is deducted from their proceeds at closing and credited to you in the HUD-1 statement. Note that no tax payments are made at the time of closing.

If you have an escrow account with your lender – Call your lender to let them know you got the bill. Although it’s likely that they already received a copy, go ahead and forward it to them. While you have them on the phone, you might want to ask them when will the payment post, and if the current escrow balance will be enough to make the payments. What you want to do is avoid a massive hike in the mortgage payments as the lender later realizes that you’re short. Further, tax accountants often prefer to see payments hit within the tax year.

If you don’t have an escrow account, or if you paid cash for your property – In this case, *you* are responsible for your property taxes, as well as hazard insurance. Make sure to pay them by the deadline, and talk to your accountant to understand what’s the timing that gives you the most advantage for your payment.

If you sold or otherwise disposed of the property – If you’re no longer the owner of the property and got a tax bill, the right thing to do is to forward it to the new owner or their agent, as they’re now responsible for these payments.

About Danny Sanchez

Joining Rianne's award-winning team after a successful career as a Program and Operations Manager for a global outsourcing firm (with Fortune 100 companies as his primary clients), Danny has seen The Woodlands grow to what it has become today since 2001. An advocate for innovation and perfecting the Best Possible Real Estate experience, he understands very well that clients always come first. In his own words, "success looks like clients feel that they don't have any needs - because you've more than anticipated them."