Sale of delinquent taxes rebuilds county accounts
Across the state, there is a common problem that is also faced in many areas of this country. There are properties in the process of foreclosure. This is not always because the mortgage payments are behind, but because the owner or owners have not paid taxes.
The good news for government agencies is that these foreclosures can help collect lost tax revenue. By selling the tax liens to interested investors, the government recovers a portion of the lost revenue. Often those taxes can be way behind. Homeowners can accumulate serious tax debt before the government goes so far as to sell tax liens, meaning the debt attached to them is often substantial.
This is true in Butte-Silver Bow County, where similar sales have occurred. There were nearly fifty properties that faced tax liens in the county last year alone, simply because people didn’t pay property taxes. Individuals and businesses, like Pacific Land Holding LLC, move in to buy those tax liens, often making big profits in the end.
This company alone purchased the tax liens on sixteen of the properties listed above. As a result, owners are responsible for payments plus interest to the new lien owner, and if they do not pay, the property becomes the property of the lien owner.
Why are investors so willing to buy often risky bonds? The answer is always the potential payout. Purchases made on delinquent tax sales can result in profits far in excess of those offered by banks, with less risk than many believe the stock market holds at this time. In the poor economy, as more people don’t pay taxes and alternative forms of investment carry excessive risk or low returns, tax-arrears sales are gaining popularity.
However, more important than guaranteed returns by investors is that governments can collect the lost funds. As a result, promised tax dollars intended to be spent on schools and government agencies are actually spent.
A spokesperson for Pacific Land Holdings, LLC went on to say that it has a greater impact on those who have not paid taxes to receive a letter from the private agency. Often, it makes homeowners take a serious look and find the money they need to save their home and pay off their debt.
It saves the government the time and hassle of contacting homeowners over and over again. It is a win-win situation for the county and the investor.
