3 Ways To Make Sure You Don't Fall Behind On Your Property Taxes
Falling behind on your property taxes is one of the worst things you can do as a homeowner. If you get behind and are not able to catch up quickly, the municipality will place a tax lien on the property, which will make it really hard to sell. Some people fall behind on their taxes because they face financial hardship, such as a job loss or major medical incident. But other times, they fall behind purely on accident because they're forgetful or don't schedule the payments. You can't do anything to fully protect yourself from job loss, but there are a few strategies you can employ to prevent accidentally forgetting to pay your property taxes.
1. Schedule online payments.
These days, most municipalities are making it possible for residents to pay their taxes online. Setting up online payment has a few advantages. You can do it when you're thinking about it, and then months later when your taxes are due, the payment will go through automatically. Also, online payment ensures there is a "track record" of the payment. You won't have to worry about the check not arriving in the mail as you would when paying with a conventional check. You can usually pay your property taxes directly from a bank account; some municipalities may allow payment via credit card.
2. Designate a separate bank account.
Another strategy is to open a separate bank account into which you can deposit money for your property taxes. Divide your total annual property tax bill by the number of pay periods in the year. Then, have your employer direct deposit that amount of money into the bank account each pay period. By the end of the year, you will have just the right amount of money to pay your tax bill. This strategy works well if you're the kind of person who has trouble saving money. It's automatically saved for you -- you don't have to think about it.
3. Have the bank put the money in escrow.
If you still have a mortgage on the property, you can have your bank collect money toward the property tax bill, hold it in escrow, and then pay your property tax bill at the end of the year. They will divide your annual property tax bill by 12 and then add the amount to your monthly mortgage payment. As long as you make that one payment each month, your property tax will be covered.
Forgetting to pay your property tax bill is never good. With the tactics above, you won't fall behind. Check out online property tax payment systems for more information.