Property Taxes and COVID-19: What Americans Should Expect at This Time

Whenever a disaster strikes, it automatically triggers relief on property taxes on the states affected by it. Why hasn’t the government declared a property tax relief for its citizens? What makes it different this time?

In cases where disasters, such as hurricanes, tornadoes, earthquakes, and other similar disasters caused by nature, causes physical damage to homes, buildings, and other properties, relief is almost always automatically granted by the state.

Reliefs come in the form of temporarily reduced property tax payments or delayed property tax bills which you can consult with your local property tax reduction services.

Why are we only just seeing extensions in filing deadlines for now?

While we are in the face of disaster, with COVID-19 still sweeping throughout the entire nation, the U.S. government’s postponement of the property tax payment deadline is not as well-received as other provisions included in the Coronavirus Aid, Relief, and Economic Security (C.A.R.E.S.) Act.

Unfortunately, even a pandemic won’t keep the tax collector from knocking at your door. For the first time ever, every state has declared a state of emergency or natural disaster. This has caused economic slowdowns along with a need to continuously fund critical public programs, and states and localities are already overwhelmed and hurting.

Even if the IRS steps in like it usually does in any disaster, it is harder for local governments to postpone — much more suspend — tax payments because they depend on those taxes to help them run essential services.

On the federal level, the resources may be vast but when it comes to the local government like counties, cities, and towns, they have significantly smaller and limited cash and credit reserves to fill in the gaps in their budgets. These include employing and paying for the very services that are strained heavily at this time because of the virus.

Local governments are responding to this pandemic differently.

people wearing masks

On the federal level, the IRS has already announced the new tax filing deadline. Regardless of the amount owed, the IRS and the U.S. Treasury have declared July 15, 2020, as the tax day for this year.

This should help those who were furloughed and laid off and buy them extra time to work on their taxes. Depending on where you live, there may be slight differences in the way the local government is rolling it out as property tax payments are governed by a mix of both local and state rules.

Some areas still expect homeowners to pay property taxes on time for the reason that it is more challenging to change property tax filing dates than income tax dates. Understandably so because local governments are in charge of setting and collecting property taxes while the state determines the date. Changing the property tax payment deadlines will require an executive order or a legislative act.

Those who pay property taxes directly will benefit the most from these extensions. Those whose monthly mortgages include their property tax payments, unfortunately, won’t get anything from this.

If you, however, are struggling with your mortgage payments, you may want to get in touch with your local bank or loan provider. There is some form of relief for those whose loans are federally backed together with some other home loans.

At this point, the longer the pandemic persists, the harder it will be for the states to make the necessary decisions to move forward.

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