An Overview on Unpaid Taxes
(Also known as "liens")

 

When property owners don't pay their school and county taxes, the Town has to pay them. And the Town doesn't collect any town taxes. That puts a burden on all the remaining taxpapyers.

  • There's less money available for other town purposes, likes roads and drainage improvements, or,
  • Taxes have to be increased to finance improvements that need to be made

 

Either way, the taxpayers who do pay taxes lose out.

 

As of March, 2012, Yorktown is owed over $5.7 million in back taxes due for 1995 through 2011.

 

The Town only gets its money back when either of the following events take place:

  • The property owner pays off the liens, which includes the original amount of the tax, plus interest and penalties, or,
  • The Town forecloses on the property, takes title it, and then sells the property for whatever amount it can get. (This type of town foreclosure for unpaid taxes has nothing to do with a bank foreclosure for non-payment of a mortgage.) If the selling price is less than the amount of the liens, the Town only recoups a portion of the  money it paid out in taxes.
    • If the Town decides to keep the property, the liens are wiped off the books and the Town never recoups its money, and
    • The Town will continue to pay school and county taxes for the property, as well as town taxes, unless the parcel is declared "parkland" and taken off the tax roll.

Yorktown's History on Non-payment of Taxes

Historically, Yorktown has not been aggressive in going after property owners who didn't pay their taxes. It has also been lax in following through on the routine paperwork needed to take certain properties, such as roads and road widening strips, off the tax rolls.

 

During 2010-2011, the following measures were taken to address this unacceptable backlog and to collect millions of dollars in unpaid taxes for the years 1970-2009.

 

1.   Given the age and problems associated with many of the liens, the Town Board declared just under $1 million in liens "uncollectable" and erased them from the Town's books, resulting in an immediate decrease in the Town's fund balance.

 

2.   After sending appropriate "warning letters," foreclosure proceedings were initiated for 185 properties owing $1.8 million in liens from 1995-2008.

a.   As of February 3, 2012, 130 property owners had either paid off their liens or entered into installment
     agreements to pay the liens,
plus the current taxes, within 24 months.
b.  As a result of this influx of revenue, in 2011 the Town's fund balance increased by almost $1 million.
c. 
As of February 3, 2012, the remaining 54 properties owe a total of $1.8 million through 2011.

3.  Foreclosure "warning letters" were sent to 179 properties with 2009 liens totaling $942,010.

a.  By October, 2011, 142 property owners paid off over $1 million in taxes, interest and penalties.
b. 
Foreclosure proceedings were initiated for the remaining 37 properties. The last date to redeem
     these loans is February 29. 2012.

4.   Also, in 2010, the town raised over $400,000 by selling eight properties, including two houses, that had previously been taken through foreclosure.

 

How the Town can collect on the unpaid back taxes.