The Excess Tax: What Are Excess Proceeds?

Out of every 200 houses, one will be foreclosed. This means that every three months, about 250,000 families fall into foreclosure because they are unable to pay their property tax.

The reasons why this happens varies. However, this results in hundreds of thousands of houses being seized and sold by the government. This leads to millions of dollars in excess tax from sales proceeds.

This can be a little confusing but you should understand how this will affect you. Read on to learn the basics about what excess proceeds mean for you.

Foreclosures and Excess Tax

Before we can discuss how this can benefit you. We need to take a moment to look at some of the background information on this topic.

Consider the following example. You own a property worth $200,000 and, after a couple of years, decide to stop paying the property tax. You will get warnings and a considerable grace period to pay it off.

However, let’s say you don’t pay it off and, after some time, you now owe $30,000 to the state and they seize your property. Then, the government will auction your house for $60,000, for the sake of this example. The difference between what you owed and what the state sold your house for, $30,000 in this case, would be the excess proceeds.

What Happens Next?

You might expect that the local government would simply pocket the remainder of the money, but laws are in effect that prevents them from taking the excess sales proceeds, also known as tax overages.

Believe it or not, but you are entitled to receive that money. However, this isn’t something they advertise so you must learn how to claim foreclosure overage for yourself.

Things To Consider

Some people recommend doing this as a way to easily make some money. However, before you stop paying Uncle Sam his property taxes, there are a few things to consider.

1. Local Laws and Statutes

The fine points of many housing and tax laws vary from state to state. There are several states that do not allow the previous home-owner from claiming the money.

2. Qualified Representation

You are definitely going to want to have a reliable attorney that is experienced in collections law and commercial litigation. They will be crucial if you want to get the most out of it.

3. Realistic Earnings

Before taking on this endeavor, you should take a hard look into property values to know what the house may go for in the market.

4. Find Houses From The Delinquent Tax List

It is possible to buy houses for dirt cheap from people who owe a lot of money on taxes. You can access a delinquent tax list and find out who owes money and send them offers.

Make The Excess Tax Work For You

Hopefully, that should clear up most of the mystery surrounding the excess tax and how it can work for you.

There is potential to make a lot of money but there are a few key points to consider. Contact us today and see how our attorneys can advise you on excess tax collection and many other legal matters.

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