Who pays the property taxes on forclosed property?

[elifino]

Is it not the responsibility of the holder of the title to pay this tax?
I would hope it would be the holder of the title.

[Ineeda]

1. I believe that's correct

and the title is held by the bank that holds the mortgage.

[ixion]

2. not the banks, that's for sure. I think it winds up as a lien on the property

that must be paid by the person who buys it next.

[DJ13]

4. This is why the municipalities are having budget shortfalls

The banks arent paying the taxes on all their foreclosures.

[MrMickeysMom]

7. Many municipalities deal with archaic state laws ...

... to finally turn property over to an interested buyer, or demolish and re-develop. However, the interested bidder at a Sheriff's Sale often gets an incentive of having these taxes forgiven as part of that process.

Sometimes, that's not enough to get properties back on the tax roles. How many people are going to go through years of this process and pay the fees only to have someone come in and outbid them?

[HockeyMom]

5. You are correct

The new owner pays all liens on the foreclosed property.

[Xithras]

6. No, not exactly anyway

The banks usually don't pay the taxes until the home is about to be sold, so they can keep the "tax loss" off their books and simply document them as being paid by the buyer.

In other words, if a house has $5000 in outstanding taxes, and someone makes a $150,000 offer on it, the banks books will actually show that they received $145,000 for the home, and the $5,000 will be internally documented as required expenses relating to the sale of the home.

The buyer pays it indirectly, but the buyer would have paid that money anyway. Either way, by the time the title is in the buyers name, there is no tax liability.

[ixion]

8. mmm... so after the accounting voodoo, the buyers pays

so my premise stands, at least insofar as who pays the taxes.

[ChandlerJr]

3. Who pays is subject to negotiation

who "owes" is the property, a tax lien goes with the property not the owner.

Many an "amateur" investor has been caught in the trap. Always check if the sale is "free and clear" if not you may owe the tax.

[sylvi]

9. My house was a foreclosure

in the hands of Fannie Mae for 2-3 years before I bought it. The only property taxes I had to pay was a prorated amount based on the taxes for the year of purchase. IOW, I moved in the first of August so I ended up paying what equaled 5 mos. worth of property taxes.

I can only imagine that Fannie Mae was paying the yearly taxes in the interim between foreclosure and the sale to me. There was nothing ever mentioned about it in the closing. Perhaps it varies from state to state.