The 4-Installment Property Tax Payment Bill creates an option for taxpayers to pay property taxes in four equal installments for property tax years starting on or after January 1, 2025. This option applies to residential real property or real property listed under improved commercial subclass codes that owe real property taxes greater than $25, and where the taxes are not paid out of an escrow account by a mortgage company.
Key Provisions of the Bill:
Eligibility for 4-Installment Payment Option:
The bill applies to taxpayers who owe more than $25 in real property taxes on residential real property or improved commercial property.
The taxpayer must not have their taxes paid through an escrow account by a mortgage company.
Installment Due Dates:
The 4-installment payment option allows eligible taxpayers to pay their taxes in four equal installments:
First installment: Due on or before February 28 (last day of February).
Second installment: Due on or before April 30.
Third installment: Due on or before July 15.
Fourth installment: Due on or before September 15.
First Payment Requirement:
To be eligible for the 4-installment payment plan, an allowed taxpayer must pay at least half of their total property tax by April 30.
Taxpayers can choose to pay their entire tax bill at any time after April 30 and up to the day before a tax lien sale occurs on the property, including any delinquent interest.
Delinquent Interest:
If an allowed taxpayer does not pay the third installment by July 15, they will incur delinquent interest at a rate of 1% per month on the unpaid amount, starting from July 16.
If the fourth installment is not paid by September 15, the taxpayer will incur delinquent interest at a rate of 1% per month on the unpaid amount, starting from September 16.
Notice for Unpaid Taxes:
Under current law, county treasurers must notify taxpayers of unpaid taxes and the potential for a tax lien sale by September 1.
The bill extends this deadline to October 15 for allowed taxpayers using the 4-installment payment plan, as they have until September 15 to make their fourth payment.
County Treasurer’s Responsibilities:
County treasurers must provide information about the 4-installment payment option to taxpayers on their tax statements, ensuring that taxpayers are aware of the new option.
Benefits of the Bill:
More Flexible Payment Options: By allowing taxpayers to spread their property tax payments over four installments, this bill helps individuals manage their finances more easily, especially for those who may struggle with larger lump-sum payments.
Increased Transparency: The bill ensures that taxpayers are informed of their payment options through clear notices on their tax statements.
Reduced Penalties for Late Payments: The installment plan provides more flexibility and may reduce the risk of property tax delinquencies leading to tax lien sales by giving taxpayers more time to pay their bills without incurring severe penalties.
Extended Deadline for Tax Lien Notice: The bill provides more time for taxpayers to make their payments and avoid tax lien sales, as it extends the deadline for notifying taxpayers of unpaid taxes.
This bill modernizes property tax payment options, providing more flexibility for taxpayers, especially those with financial difficulties. It aims to reduce delinquencies and make it easier for property owners to meet their tax obligations.
Summary
Under current law, property taxes must be paid either in full on or
before April 30 or in 2 equal installments, the first due on or before the last day of February and the second due on or before June 15. For property tax payments made for property tax years commencing on or after January 1, 2025, the bill creates a 4-installment-payment option for taxpayers that owe real property taxes in an amount greater than $25 on residential real property or real property that is listed by the assessor under any improved commercial subclass codes and that do not have such taxes paid out of an escrow account by a mortgage company (allowed taxpayers).
Under the 4-installment-payment option, allowed taxpayers may
pay their real property taxes owed on residential real property or real property that is listed by the assessor under any improved commercial subclass codes in 4 equal installments, the first due on or before the last day of February, the second due on or before April 30, the third due on or before July 15, and the fourth due on or before September 15. An allowed taxpayer must pay at least half of their real property taxes owed on or before April 30 to be permitted to make installment payments pursuant to the 4-installment-payment option in that year, however, an allowed taxpayer can pay in full the real property taxes owed at any time after April 30 and up to the day before the date of the sale of a tax lien on the allowed taxpayer's property, including delinquent interest, if any. County treasurers are required to provide information about the 4-installment-payment option with tax statements.
An allowed taxpayer that does not pay the third installment of real
property taxes owed on or before July 15 owes delinquent interest on the unpaid third installment at a rate of 1% per month that the installment is unpaid accruing from July 16, and if an allowed taxpayer does not pay the fourth installment of real property taxes owed on or before September 15, the allowed taxpayer owes delinquent interest on the unpaid fourth installment at a rate of 1% per month that the installment is unpaid accruing from September 16.
Current law requires the county treasurer to provide notice to
taxpayers that have unpaid property taxes that, if remaining unpaid, may be subject to a tax lien sale by no later than September 1. Under the bill, allowable taxpayers paying pursuant to the 4-installment-payment option have until September 15 to make their fourth installment payment of real property taxes. Accordingly, the bill extends the September 1 notice deadline to October 15.
