Falling behind Real estate tax collections slow: Delinquent parcels up 36 percent over last year
Posted on Sunday, November 30, 2008
Real estate tax collections in Washington County have fallen behind last year’s pace, and the number of parcels with delinquent taxes has jumped significantly.
Washington County Tax Collector David Ruff said about 91 percent of the county’s property taxes due in 2008 were collected as of Nov. 18. That’s down from 93 percent last year, he said.
The county has collected about $134.9 million in real and personal property taxes for 2007 due in 2008 and about $2.2 million in delinquent taxes so far this year, officials said.
Even though the percentage is down this year, total collections are up because the county’s tax base has increased. Last year, the county collected about $122.8 million in taxes, according to data provided by the collector’s office. Most of that tax money goes to fund local schools, Ruff said.
The number of people with delinquent personal property taxes increased slightly from 21,043 taxpayers in 2007 to 21,550 in 2008 — about 2.4 percent.
“The difference is real estate,” Ruff said.
The number of parcels with delinquent real property taxes increased from 3,584 in 2007 to 4,867 in 2008 — almost 36 percent.
One of the reasons that the number of parcels with delinquent taxes has increased so much in 2008 appears to be the large number of vacant lots in subdivisions.
Single-family homes that are occupied are not the likely culprit. Most homeowners’ real estate taxes are paid through their mortgage companies, which often require debtors to pay an amount into escrow each month to pay taxes and insurance. Even if the debtor is past due on the mortgage, the taxes are often paid on time anyway.
A review of the delinquent property taxes published Nov. 23 shows that a large number of the delinquent parcels are on vacant lots in subdivisions.
Washington County Assessor Lee Ann Kizzar said its common for developers to wait until they sell a lot to pay the property taxes. The buyer pays the taxes at closing so the developer never has to be out of pocket.
Some developers may be in for sticker shock when they get their tax bill. The taxes on an 80-acre tract might be around $100 per year if the property is used for agricultural purposes, but if that land has been developed into a subdivision, the tax liability is much higher.
The Sundowner Ranch subdivision in Prairie Grove provides a good example of what happens when hundreds of acres are developed into lots that remain unsold. More than 340 lots in this subdivision have delinquent taxes ranging from $175.15 to $232.20 each, according to the delinquent tax report.
In the current soft real estate market, those taxdue bills are coming at a time when developers are struggling to sell lots and make payments to the banks that financed the developments.
If a subdivision is developed in phases, then the owner can the delay the higher tax liability on the undeveloped portions.
FEEDBACK:
Something to say about this topic? Submit a Letter to the Editor online
