While the complete impact of the Covid-19 pandemic is relatively unknown for the next few years, we do know that the disease has forced us into an economic recession the likes of which few of us have known.
Residential property taxes have been discussed little especially on what will happen to the rates once the country reopens. While some believe that they may drop during that time, others are of the opinion that the drop will not happen for at least three to four years post Covid-19.
Why Property Tax Rates May Not Drop
Property taxes are mostly based on the value of a home even if the final rate is determined by the state. Local governments need them to pay for public services that can benefit the community at large such as public schools and trash collection. However, during the pandemic when most home owners are unable to pay mortgages, some states are trying to ease the burden of tax payments.
For example, home owners have three additional months to pay off federal income taxes. However, when it comes to paying off taxes on your home, the rate and frequency of payment is determined by the local government and state rules.
The Role of the CARES Act
On the other hand, if you have undergone severe financial hardship because of the pandemic, you can be eligible for the Coronovirus Aid, Relief and Economic Security (CARES) Act. If you are eligible, you can opt for mortgage forbearance in which your lender can allow you to pause and maybe even reduce mortgage payments for a limited amount of time. Under the Act, the lender cannot foreclose on you or finalize a foreclosure judgment of sale for 60 days.
The extra time you get to pay off the amount can help you financially especially since the tax bill for single family homes is now three to five times higher than it was last year. However, this doesn’t mean that pending amounts are erased. You will still need to pay them over time. At the end of the forbearance period, you will be contacted about how those payments have to be repaid via different programs.
The bottom line is that property taxes cannot be predicted with any accuracy during this time. What home owners can do is take advantage of government relief programs and ride out the storm with the hope that they can recover losses post pandemic.
At Patton Properties, Inc. we have represented over 350 owners ever since we opened our doors in 1979. As a full brokerage company, we specialize in providing full service solutions that can fit the needs of home owners and landlord. We can help you explore your options for residential property taxes as well. Get in touch with us for a consultation today!