Property Tax Assessments and Property Tax Arrears

Property tax assessments are important because they determine the value that will be used by the municipality when calculating your annual property taxes.

Property taxes are one of the few debts that take priority on a property. What does this mean? If you were to default on your mortgage payment with property tax arrears, the property tax arrears must be paid otherwise property ownership could be transferred to the Queen. If a lender were to take possession of a property in the event of a mortgage default, they would not be able to sell it without first paying the property taxes.

It is for this reason that many lenders will collect your property taxes in conjunction with your mortgage payment each month and remit your property taxes on your behalf.

Most mortgages contain standard charge terms. These terms require that the borrower keep their property taxes up to date. If you have property tax arrears, your bank could do one of several things, these include:

1. Sending you a notice demanding that you pay your property tax arrears

2. Paying the property taxes on your behalf and then demanding payment in full

3. Calling in your mortgage and demanding to be paid off – in extreme cases

Property tax arrears can cause a snowball effect. Missing even one year of payments can cause thousands of dollars of debt to accumulate. You cannot go bankrupt on property tax debt because it carries with the land. If you have property tax arrears, the faster you deal with the issue, the better. Ignoring the problem will only cost you more in the long run because you will pay interest on the debt and if they file a lien on your property, you will have to hire professional help to get it removed.

Here are some helpful tips for dealing with property tax arrears.

1. Consider the big picture. If you owe too much in property tax arrears to pay off and/or you have other debt, a consolidation may be the best choice.

2. You can consolidate debt through obtaining a loan or mortgage. Refinancing your mortgage to consolidate debt is an effective solution because the interest rate will usually be low, giving you lots of flexibility when setting the amount of your monthly payment.

3. Do not walk in to your bank and ask for a loan to pay property tax arrears. Although well intentioned, this could disrupt your relationship with your bank. Pursue a relationship with a licensed mortgage broker where you can openly discuss the issues. A mortgage broker can recommend transparent solutions with financial institutions that will be open to helping you resolve your situation.

4. If you refinance your mortgage, ask that the lender collect your property taxes with your payment so that you don’t have to worry about it again in the future.

For more information about property tax assessments and property tax arrears please visit http://www.gtamortgagematters.com/