Property taxes, due once a year, are often handled within mortgage agreements if financing has been done through a major financial corporation or bank. If not, however, it is the individual’s responsibility to pay property taxes, and collecting these taxes is left to the county and/or other local government. When a property owner fails to pay these taxes on time, the next step is for the collecting party to draft and send a property tax collection letter.
Purpose of a Tax Collection Letter
The tax collection letter’s purpose is to resolve the situation without the need for escalation, such as involving a collections agency or putting a lien on the property in question. This means the letter should be constructed in a way that encourages the property owner to either pay the full balance or to reach out about payment plan information. In order to do so, here are some key points and examples to use in a tax collection letter.
Tax Collection Letter Sample
Use a professional header format so that it’s immediately clear to the reader what they are looking at. Include the name and address of the recipient, the date, then a subject line clearly stating that this is about delinquent property taxes for the property in question. Here is an example letter to tax delinquent homeowners:
Mr. and Mrs. Lastname
City, State, Zip
Re: Delinquent Property Taxes
[Escrow account number if related]
City, State, Zip
Be sure to use proper and professional grammar and spelling throughout the letter. It’s important that the reader takes this letter seriously and agrees to some sort of action.
Explain the Financial Situation
Explain the financial situation using all available details. Explain that taxes have not been paid on time for this property, then reference the amount due and the date that it came due. Mention if the amount includes penalties and interest so that they know they are looking at the exact value owed. For example, here is a delinquent property tax letter sample:
I/We have learned that property taxes for the property mentioned above have not yet been paid. These taxes from fiscal year(s) [insert tax years] were due on [due date], and the amount owed is [total]. This includes penalties and interest. [Option: break down the taxes, penalties and interest if it’s available. This can help property owners better predict their tax expectations for the next year.]
Discuss Next Steps
Explain that the best-case scenario here is if the owners can promptly pay the owed taxes, or are willing to discuss a payment plan. Mention any consequences of non-payment. Give deadlines for response and for total payment, so that the recipient knows exactly what timeline they are working with.
If full payment can be made within the next 30 days, no formal collections activity or property liens will be initiated. If partial payment can be made within that period, contact us to work out a payment plan. [Explanation of consequences – will vary from county to county.]
Be Positive and Express Confidence
End on a positive note, expressing confidence that the issue can be resolved. Be sure to include all contact information for the individual, office and/or agency that will be receiving any payments or inquiries.
I/We are sure this situation can be easily resolved. Please send payment to the address below, or contact us to set up payments. We will delay any action for the next 14 days while awaiting a response.
[office or agency]
[address for check]
[city, state, zip]
[phone number(s) as needed]
The letter’s format is not as critical as the information it needs to contain. Make sure the amounts mentioned are accurate and all deadlines are clearly stated. With a clear path forward and the consequences right there on the page, the situation should be easily resolved for all parties.
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