If you haven’t paid your Mecklenburg County taxes in five or more years, you may now be in more danger of losing your property.
The county is getting tough on delinquent taxpayers, adding hired help to foreclose on and resell the property of owners who are years overdue.
The county has always had the right to foreclose, says Mecklenburg tax collector Neal Dixon. But it’s happened relatively rarely – 36 to 40 times a year in recent years.
“Foreclosure is the last option when nothing else works,” Dixon said.
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At the end of 2016, taxes were overdue for 7,864 properties, with bills totaling $23 million. Nearly half the overdue bills, or about two of every three dollars owed, were more than five years overdue.
“We do think there are properties that can be useful to a new owner,” Dixon said. “Addressing these delinquencies will take property where taxes have gone unpaid for various reasons and potentially turn it into property that will generate tax revenue again.”
Property taxes are the lifeblood of county government. The county will take in $990 million in property tax revenue, 60 percent of its budget, this fiscal year.
But death, divorces and job losses often leave bills unpaid. Many bills are long-overdue because the taxpayer has died or a company has dissolved.
Interest alone on overdue tax bills, required by state law, can quickly make them mushroom: 2 percent in the first month of being past due, then another 3/4 percent every month after that. An overdue bill would grow by more than 10 percent in just one year.
Dixon calls the changes new tactics in existing policy. But he acknowledges that taxpayers are likely to view it as a more aggressive use of foreclosure.
The county is seeking bids for two law firms – it previously had one – to work on collections including foreclosures.
It will also hire a real estate services firm to market properties and help grow the pool of potential buyers, a step that could accelerate the rate of foreclosures.
Under an existing three-tier strategy, the county expands legal pressure, including potential foreclosure, when tax bills are two to five years overdue. Those more than five years late get full pressure, potentially including foreclosure.
A county website with information on properties facing foreclosure will be online by July.
While it hasn’t yet done so, the county itself may start bidding on foreclosed property that has no bidders, for county use or to transfer to a partner for uses such as affordable housing. County commissioners were briefed in January but asked for more details on a grant program to help bid on foreclosed property.
Dixon credits growing tax collections – the rate was 99.6 percent in fiscal 2016 – in part to the fieldwork of a staff that knocks on delinquent taxpayers’ doors before taking more dire action.
North Carolina law allows the county a range of other options to collect its taxes, including garnishments on wages or bank accounts.
Because state law demands that all taxpayers be treated equally, the county can’t consider demographic or socioeconomic factors in going after delinquents.
But county policy is to work with taxpayers who have trouble paying their bills, and officials urge those taxpayers to contact the county before the tax due date. Check the status of your tax bill here.
“We’re trying to break the cycle of delinquency,” Dixon said. “Because some people struggle, they’ll pay one year (of taxes) but can’t the other years.”
How foreclosure works
Once an overdue property tax bill is referred to a county attorney, the attorney will notify the owner of the county’s intent to foreclose. The attorney will try to reach all interested parties, including the heirs or minor children of dead taxpayers. The impending sale is published in the Mecklenburg Times, which reports on real estate, and posted in the county courthouse. The property is sold on the courthouse steps to the high bidder, although higher upset bids may be made for a time after the sale. The taxpayer has the right to pay back taxes and costs until the sale becomes final. The process typically takes up to nine months.