Property tax due? How to cope if you’re strapped because of the coronavirus pandemic
Millions of Americans suffering from job losses or reduced income are struggling with their April bills, ranging from rent to auto payments. And many of the nation’s 80 million homeowners will soon come up against another bill: their property taxes.
These taxes are exclusively levied by local governments, such as cities and counties, as a way to finance schools and to pay for services such as roads and police departments.
They represent the single most important source of local tax revenue in the country, says Jared Walczak, director of state tax policy at the Tax Foundation, a think tank focused on tax policies.
Because these taxes are overseen by thousands of municipalities and counties, they haven’t seen the same type of large-scale response to the coronavirus pandemic as those issued by the Internal Revenue Service and state governments.
Last month, the IRS said it would delay the April 15 tax filing deadline until July 15 to give pandemic-stressed taxpayers more time to get their filings and payments ready. As of April 1, only three states – Idaho, Mississippi and Virginia – have not pushed back their tax filing dates to July 15.
Local governments have been slower to react. Only a handful of states have directed municipalities to issue property tax delays, according to the Tax Foundation’s tracking of state responses to the COVID-19 pandemic. Among them is Washington, one of the centers of the coronavirus pandemic, which gave counties the ability to delay their property tax deadlines beyond their traditional April 30 due date. In response, several of Washington’s 39 counties said they’ll push back their April deadlines.
In other regions, some homeowners say they’re in limbo.
Alana Aleman, 33, a professor at a community college who lives in Sugar Land, Texas, says she didn’t have the money to pay her full property tax bill of about $1,000 because she was coping with unexpected grocery costs due to shortages and higher prices amid panic buying at stores.
“When this started gaining steam in March, we knew we had a property tax payment that had to be postmarked March 31,” she says, referring to herself and her elderly parents, who live with her. “We wondered if the county might postpone the payments because of the pandemic. We were looking at the websites, looking for Gov. [Greg] Abbott to direct our counties to provide property tax relief. So far, we have seen nothing.”
Aleman said she called her county to ask for relief but didn’t receive any help. She said she sent a partial payment of $500.
“It’s either, ‘Do you pay your property taxes in full, or do you feed yourself?’ ” she says.
Can you get a waivers, payment plan?
Some towns and counties will be willing to work with homeowners who are strapped and can’t make their property tax payment, Walczak says.
The first step is to contact your property tax office to discuss setting up a payment plan, he says. Some may have programs available to waive interest or fees from late payments.
Don’t wait to contact your tax officials, he recommends, because it’s better to address the problem early on rather than accrue interest and other fees. Failing to pay your property taxes can lead to harsher penalties, such as a tax lien or even foreclosure.
“There are programs in place in localities where a taxpayer can file for relief, and those will likely be more heavily utilized now,” he says. “There are some indication localities will be accommodating of those needs.”
Even so, not every property owner will get equal relief.
King County, Washington – one of the counties that has postponed its April 30 property tax deadline – says the extension until June 1 is only valid for property owners who pay their taxes themselves. Owners that pay through their financial institutions will need to pay by April 30.
The response from towns and counties is likely to be “piecemeal,” Walczak notes. For one, local governments are much more constrained than states and the federal government in their ability to delay tax revenue.
He says, “Localities will struggle if revenue comes in more slowly, which is why some have been loath to extend the deadlines.”
Aimee Picchi is a business journalist whose work appears in publications including USA TODAY, CBS News and Consumer Reports. She spent almost a decade covering tech and media for Bloomberg News. You can find her on Twitter at @aimeepicchi.