How long can you go without paying your property taxes in Washington?

There’s no sugarcoating this: If you fail to pay your property tax, in Washington or otherwise, you can wind up losing your home. 

Why do you need to pay your property taxes?

Property taxes are the lifeblood of local governments. These taxes are levied from real property such as a person’s residence, vacation home, rentals, or industrial property. In some states, these taxes are even assessed on vehicles, furniture, business equipment, and industrial machinery. Without the income coming from property taxes, it will be impossible to fund public projects such as schools, parks, roads, and payroll for police, firefighters, and municipal employees. 

Property Taxes in Washington State

Your property taxes are calculated from your home’s assessed value and the prevailing tax rate. The average property tax that Americans pay is $3,630, at an effective tax rate of 1.04%.

If you’re lucky enough to live in Washington, you pay no personal income tax. What’s more, property taxes are capped at 1% of your home’s market value, and currently, it averages at 0.98% across the state. This rate can further be reduced for qualified property owners, such as senior citizens or those on disability. 

Every year, your county’s assessor’s office determines the fair market value of the properties in their jurisdiction in order to compute how much goes into your tax bill every February. The county is required to perform physical inspections at least once every 6 years to accurately reflect market conditions in their assessments.

Home improvements can increase your home’s value, which would proportionally increase the tax you’ll need to pay. Thankfully, there are cases where you can get a 3-year exemption from paying taxes on the improvement. Get in touch with your local county or check their website for more information.

What are the penalties for failing to pay property tax?

In Washington,the first half of your property tax payment is due every April 30, with the second half to be paid 6 months later on October 31. If your total tax bill is less than $50, it is due in full immediately.

If you fail to pay on time, the county treasurer will start charging a penalty and interest. For a property with four units or fewer, an interest of 0.75% per month; and, for those with more than four units, the interest will be 1% per month, and on top of this there will be a penalty of 3% on June 1st, and another 8% on December 1st. All of these are charged on the full amount of tax owed, so it adds up quickly.

Can the state initiate foreclosure proceedings against my property?

If taxes are three or more years’ delinquent, the county treasurer will start foreclosure proceedings as mandated by state law. Once the treasurer files a Certificate of Delinquency with the court clerk, the tax foreclosure process is officially initiated. Afterward, they will order a title search to find all lien holders of your property and inform them of the foreclosure by mail. At the same time, you will also be served a notice of court action.

If you don’t pay the property tax owed, along with the interest, penalties, and foreclosure costs, your house will be sold by the county via an auction. The county treasurer will put up a notice of sale indicating the specifics, for ten days, in three public places across the county.

How Does a Tax Sale Go?

Once you are three or more years delinquent in paying property taxes, the government will place a tax lien on your home which is essentially a legal claim on the property to recoup the government’s losses resulting from unpaid taxes. Tax liens are considered a first position lien on the property, which means the holder of the lien has priority in assuming ownership in the event of a default. These liens are also an attractive investment vehicle and are available in two forms: 

• tax lien certificate
• tax deed

Tax lien certificates or deeds are sold at an auction with the bids starting at the total amount of back taxes owed, interest, penalties, and associated costs of selling the property. Liens are an opportunity for investors to acquire real estate for pennies on the dollar because these only cost a couple hundred to a few thousand dollars versus what they’re able to potentially get.

A tax lien certificate is a bid on the right to collect interest on the delinquent taxes. Depending on the location, interest can range between 8% to upwards of 30%. On the other hand, winning a bid on a tax deed grants ownership of the property to the buyer. 

It is important to remember that Washington is a tax deed state. This means the winning bidder now owns the property unless you’re able to clear the tax deed within the redemption period.

Example of a tax deed sale in Washington

Let’s say your property, which you own outright and is free and clear of mortgage, has a market value of $150,000 and you owe 12,000 in back taxes.

It was then auctioned off and the winning bid was $62,000. The $12,000 goes to the county, and the remaining $50,000 goes to you.

In exchange, the investor gets your home, with an equity profit of $88,000 to boot.

What happens to my mortgage during a tax foreclosure?

If you wind up losing your home through a tax foreclosure, your mortgage gets wiped out because tax liens have first priority. Evidently, this is not in the best interest of your mortgage lender, so they typically advance money to pay off your delinquent property taxes which they tack on to your existing balance. This way, if you’re unable to keep up with your mortgage payments, it’s your lender who will initiate foreclosure proceedings against you.

How can I stop the tax foreclosure process?

You can stop the foreclosure at any time after receiving the notice, usually in June, up to the end of business day just before your property is to be auctioned off. Tax sales are typically held in December or January, depending on the county, which means you’ll have about 6 months to redeem your house. However, it is not advisable to wait that long as fees will accrue, burying you deeper in the hole you’re in.

Can you get your house back after a tax sale?

In Washington, you have eight months to get your property back after your tax deed has been sold off. To redeem your property, you must pay the deed holder the outstanding amount plus all the interest accrued.

Closing Thoughts: How long can you go without paying property taxes

Technically, you can go three years without paying property taxes in Washington. Unfortunately, interest and penalties will quickly pile up, swallowing you up like a financial quicksand which can be an absolute struggle to get out of.

If you’re having problems paying your property taxes, you can get in touch with your county to see if you qualify for certain tax reduction programs, ask for extra time, or challenge your home’s assessed value. With the latter, you must be able to clearly demonstrate that the estimated market value of your home is inaccurate. 

However, if you’re already facing tax foreclosure and are unable to pony up the cash to save your home, you can consider selling your house to cash home buyers in Washington. If you go this route, you’d want to sell as quick as you can.

And this is where our expertise lies. We’re the Kind House Buyers, Keith and Krixelle, and we buy houses as is, where is–and yes, even in the middle of foreclosure proceedings! We act fast too, and we can close in as little as seven days. As local home buyers familiar with the real estate market here in Washington, we won’t lowball you!

Fill out our form below with your property address, phone number, and email to get our quick, no-obligation cash offer delivered straight to your inbox!

Call us at (253) 216-2497 if you have questions regarding the process, and we’d be happy to discuss with you!

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