Unpaid taxes on Des Moines home (sale, 2013, house)

[amazinmets73]

I own a home in Des Moines that I purchased in 2008. The house has unpaid taxes on it for over 10K. Recently my dad had been living in the house, but he passed away a few days ago. House is now vacant. I'm willing to put in some money to satisfy the taxes, but not for what's being asked by the city. Is there any situation where the city would be willing to remove the interest on the taxes? House is located in the 50314 area code.

[runewell]

I'm more interested in finding out how the house has 10K of unpaid taxes. Sounds like they were never paid from the moment you bought the house.

[capitalcityguy]

As most cities are scraping by trying to find more revenue, hard to imagine getting cut a break. Just my opinion...no experience on the topic.

[amazinmets73]

Originally Posted by runewell

I'm more interested in finding out how the house has 10K of unpaid taxes. Sounds like they were never paid from the moment you bought the house.

You're correct

[runewell]

Originally Posted by amazinmets73

You're correct

Time to start paying them then, I guess.

[schmink]

I would start paying on them before they get sold in a tax auction.

[TedH71]

Wow, why didn't you pay taxes from the start? If you had done that, I promise you the annual taxes wouldn't be so high. It really sucks if they sell your house at a tax auction for the price of the back taxes. Someone's gonna get a real good deal for $10k!

[amazinmets73]

Originally Posted by TedH71

Wow, why didn't you pay taxes from the start? If you had done that, I promise you the annual taxes wouldn't be so high. It really sucks if they sell your house at a tax auction for the price of the back taxes. Someone's gonna get a real good deal for $10k!

Eh, 10K for that house isn't a great deal. So, if they auction it off for less than what the tax debt is do I still owe the state anything?

[pepe1]

Originally Posted by amazinmets73

Eh, 10K for that house isn't a great deal. So, if they auction it off for less than what the tax debt is do I still owe the state anything?

If the tax bill goes to auction, you're going to owe the private investor that purchases your tax bill at that auction. You'll owe him the full $10,000 plus 18% interest plus a redemption fee. Failure to pay the private investor within a reasonable period of time will mean you forfeit your entire interest in the property to the investor, I.e. The investor will own the property.

If you have any intention of keeping the home, your most economical route in doing so is to start paying the county what you can on the owed taxes.

[Meemur]

Originally Posted by amazinmets73

Eh, 10K for that house isn't a great deal. So, if they auction it off for less than what the tax debt is do I still owe the state anything?

Best bet: contact the county treasurer's office and ask.

You may also want to check an accountant about the tax implications of the house being auctioned off. That sale may be treated as income (as forgiveness of debts can be), and you might be on the hook for additional federal income tax. A free online resource would be the IRS Publication 17 (2013).

If you own one of the nasty little hovels in that zip code, I understand why you might want to just walk away, but please do a little more research before you do that. It may end up costing you more to walk away than if you had tried to work out a deal with the city.