Home ownership is one of the central features of the American Dream, but countless American seniors may be at risk of losing their houses over just a few hundred dollars in unpaid taxes, reports the New York Daily News.
According to a report from the National Consumer Law Center (NCLC), little-known state laws allow municipal governments to repossess from seniors and other vulnerable individuals and sell them to banks and investors, who then in turn sell those properties at huge properties.
Losing homes due to late taxes can be “devastating for individuals, families and communities,” John Rao, author of the NCLC report, told the newspaper.
Here is the basic scenario, according to the newspaper:
- The homeowner is late in paying their property taxes.
- The municipal government files a tax lien document, allowing it to seize the property if the taxes still are not paid.
- If the taxes remain unpaid, the town or city auctions the document to interested investors, which may include banks or even individuals.
- The house can be re-purchased by the original owner, provided that they pay the back taxes plus associated interest and fees.
- But if the tax isn’t paid, the investor can sell the home and make their profit.
This shocking revelation is a reminder why it’s important to pay taxes on time. It’s also another reason why an assisted living community might be best for you.