Twenty of the 34 accounts that received demand letters last month under the town’s newly revised tax sale policy avoided having their homes sold out from under them, at least for now.
Assistant finance director Sarah Macy said of those 20 accounts, one applied for abatement, seven paid in full and 12 entered a payment plan while making at least one payment, all of which has reduced the town’s total delinquencies by about $141,000, or 15 percent.
Macy said accounts with active payment plans are expected to bring in about $32,000 more this month.
“This is working better than any of us would have guessed,” selectmen Michael Plageman said after Macy updated the selectboard June 18.
Macy initially requested the new policy in March after the town’s audit showed the total of taxes more than 60 days overdue exceeded $550,000. She said the goal was to initiate a conversation with delinquent taxpayers.
Three months later, the response to the demand letters has been more positive than expected, she said, with some people thanking her for informing them they were behind.
In one case, someone didn’t know they owned the land anymore. In another, a homeowner was paying an escrow company that hadn’t forwarded tax payments. A conference call with the two parties cleared that up, Macy said.
The 14 remaining accounts were forwarded to the town attorney. They must now pay 50 percent of their balance and get on a monthly payment plan, or else their properties will be sold in an auction-style sale that allows towns to recover owed property taxes.
Tax payments are due twice a year and the town sends out quarterly delinquent notices. Late tax payments prompt a one-time 8
percent penalty and delinquent payers are charged an additional one percent interest per month.
Under the new policy, tax sales are trigged whenever the town’s total delinquent taxes, interest, penalties and fees are more than 3 percent of the current year’s budget for property tax revenues. The list of properties included in any sale are those without payment plans that are either delinquent for multiple years or for one year while owning more than $10,000.
Sales can also be trigged if one or more accounts without a payment plan have more than $50,000 in delinquent taxes and related fees.
As of June 13, delinquencies in town total $811,000, and more than half of that balance comes from 28 accounts on active payment plans and in good standing.
Macy said all but one of the 14 still-delinquent accounts simply ignored the town’s demand letters. The delinquencies for those accounts total $272,000, with an average balance of about $19,500. The oldest dates to 2009 and the highest is over $60,000.
The town attorney is now working to identify all lien holders, who are also notified of the delinquency. The town must then post an advertisement in The Reporter three weeks in a row before the sale, which could come as early as this year.
The highest bidder wins the title but doesn’t receive it for 366 days, giving homeowners a year to pay back all the delinquent taxes and associated fees.
Macy noted recouping back taxes has a positive impact on the towns’ budget-to-actual totals, but she said the No. 1 reason for doing it is to hold people accountable.
“Once you get behind on your taxes, it’s really hard to get caught up,” she said.