Written by attorney Henry Daniel Lively

What is the Affect of Non-Payment of Property Taxes in California?

If property taxes are not paid when due, they become a lien on real property. If the taxes remain unpaid, the property can ultimately be foreclosed and sold at a tax sale. The proceeds of that sale will first be applied to the tax debt; the balance, if any, will be paid to the ex-property owner.

If the tax installements are not paid when due, they become a lien on the property on March 1 immediately preceding the fiscal year for which they are levied. If they remain unpaid, then the property is sold to the state. This sale to the state is only a bookkeeping entry that starts a five-year redemption period running. The taxpayer then has five years from the sale to redeem the property by paying all delinquent taxes and penalties.

If the property is not redeemed, then at any time after the five-year period the property may be deeded to the state. The land is then called tax-deeded property. The owner is divested of all rights to the property at this point. The property is then sold at a public auction. The deed to the state conveys title free and clear of any private liens. The deed from the state to the new purchaser is a new title rather than a title derived from the former owner. Therefore, the new owner may receive better title than was held by the original owner. Any amounts tht are received in the sale over and above the amount of delinquent taxes and penalties are paid to the original owner who now has no personal liabliity for the payment of property taxes. Even if the proceeds of the sale are insufficient to pay the taxes, the original owner's property tax liability is eliminated.

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