If a property is delinquent in property tax payments for more than one year, it will go to what is called a Tax Sale. The Tax Office sends out delinquent notices four times a year. One notice announces the actual Tax Sale.
In a Tax Sale, the Municipality does not sell the delinquent property but sells Liens on the property. The liens represent the unpaid taxes and are put out to bid with payback interest rates starting at 18% and decreasing to 1%. A person who buys a property lien pays the City the amount of the delinquent taxes. That lien holder can then legally collect payment from the property owner, at the interest rate of the lien. This process can be costly to a homeowner and if not taken seriously the home can become subject to foreclosure by the lien holder.
A 6% year-end Penalty is also added for all subsequent payments made by a Lienholder in a year that totals $10,000 or more.
If a property is more than a year in delinquency, and the owner has a court-ordered bankruptcy in place, the property is then excused from Tax Sale. However, property taxes are still billed and due and must be paid. Paying taxes when due can help keep the Woodbury tax rate level. Unpaid taxes create a serious financial problem for the City.