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Health & Fitness

Collecting Unpaid Taxes: Some Unfinished Business

The town lost $912,000 when it took title to 23 properties, including 5 houses, in a foreclosure proceeding. Some of that money can be recouped if the town acts quickly to sell the properties at auction.

Collecting Unpaid Taxes: Some Unfinished Business

Yorktown just lost $912,000 — the value of the liens (aka unpaid taxes) on 23 properties that were “wiped out” by the Town Board in June after the town took title to the properties, a mix of five houses and 18 parcels of vacant land, in a May final foreclosure proceeding.

The properties were part of a foreclosure proceeding initiated in 2011.

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(Unpaid town taxes are recorded on the town’s books as having been paid when they are levied. But when  property owners don’t pay their school and county taxes by the due date, the town has to pay the outstanding tax bills. If and when the back taxes are paid, the town also collects interest and penalty charges which are recorded as “new” revenue in the town’s books. So, when liens are wiped out, the town takes a double hit: the lost tax revenue and the lost interest and penalty charges.)

But the Town Board isn’t finished dealing with the 23 properties. The Board still has to decide:

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  • What to do with the properties
  • Which ones should be kept — or sold
  • What to do with the properties it decides to keep

 

Unless the Town Board wants to become a landlord, the obvious answer for what to do with the five houses is to sell them at auction — and as quickly as possible. The sooner the houses are sold, the sooner a private party starts paying the next tax bill – which will be the September/January school tax bill.  The decision to select an auctioneer and set the auction date should be a no brainer.

The Town Board should also set itself a deadline for deciding the fate of the 18 vacant parcels. Board members already have all the information they need regarding each parcel, including recommendations from the Advisory Committee on Open Space, which parcels may be of interest to abutting property owners, and, in the case of one parcel, the name of a potential buyer.

Like the houses, the sooner the Board decides the fate of these vacant properties, the sooner they are either put back on the tax roll, or declared exempt so that taxpayers no longer have to pay county and school taxes on them.

The longer the Board delays its decisions, the more it costs taxpayers.

Last year, because the Board waited until after the June 1 deadline to take to 17 vacant parcels off the tax roll, taxpayers ended up having to pay another year’s worth of county and school taxes for each parcel.

And there’s still more unfinished business that needs to be attended to.

What about the remaining six houses on the 2008 Foreclosure List that owe a total of $774,400 in taxes, interest and penalties? What steps are being taken to collect this money? And why weren’t they foreclosed on?

Then there’s the matter of the Sultana Pool that currently owes $59,000 in back taxes, interest and penalties. The 2013 assessment roll reduced the assessed value of the property to $2,300 from $6,500 based on the age of the pool and its life expectancy — but that assessment won’t kick in until 2014 taxes.  In the meantime, what steps does the town plan to take collect the $59,000? Or, does the Board intend to let a small group of homeowners off the hook —permanently —while they continue to enjoy the use of the pool and other taxpayers struggle to pay their taxes?   

Next is the 2009 Foreclosure List.  What’s being done with these properties?  The time has long since passed when the town could take title to these properties, keep what it wants and sell the rest at auction.

And finally, what’s being done about the 2010 Lien List? How much is owed? Has the town started foreclosure proceedings, and if not, why not? An official letter notifying a property owner that the town expects to commence foreclosure proceedings often has a dramatic effect when it comes to paying up back taxes.

The longer the town waits to collect unpaid taxes, the harder it becomes to collect them —and the greater the likelihood that the taxes will never be paid. Inaction is costly. It’s wasteful.  And above all else, it’s inexcusable.

For more information about unpaid taxes, visit www.yorktownbettergovernment.org

 

 

 

 

 

 

 

 

 





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