A tax zombie is a vacant property whose homeowner left after defaulting on their property taxes. Like foreclosure zombies, these abandoned homes blight their communities with reduced property values and serious health and safety concerns. Unlike foreclosure zombies, there is no legal recourse for concerned neighbors to report neglect and no legally mandated timeline for the foreclosure process.
As of 2024, over 7,200 residential properties in Erie County have outstanding property tax balances.
When homeowners fall behind on their property taxes, they’re charged a compounding interest rate of 18% every year on that debt. That’s higher than the maximum that private lenders can charge in New York (16%), and can quickly make small debts impossible to repay. For instance, in 2021, interest represented 43% of all the money owed on properties at foreclosure auction.
Most homeowners who fall behind on their property taxes do so as a result of job loss, medical issues, or another form of hardship. The effect of high property taxes and high delinquency rates can drive well-meaning, hardworking people out of the homes they have owned for generations.
“I inherited my home in 2011. There was no mortgage on the home and my housing should have been secure for the rest of my life. I lost my job in 2016, and I was unable to find a new one for almost an entire year. During this time, I fell behind on everything, including my property tax. Once I obtained a new job, the interest had already been applied to my past due balance, and I could not afford to catch up. I was ten years behind when Erie County placed me on the foreclosure list and now owed almost five thousand dollars.”
Patrick from Buffalo
“My husband and I have owned our home since 1976. Two years ago, my husband suffered a heart attack and had to have triple bypass surgery. We are both in our 70’s and cannot work, and my husband is disabled from his health issues. We are only 2 years behind on their property taxes, which average $7500 per year. However, because of the compounding interest, our past due balance increases significantly every month. We want to find a way to keep our home, but the compounding interest makes it much more difficult.”
Anon from Depew
Proposed Solutions
Lowering the Interest Rate from 18% to 12%
When homeowners fall behind, the current rate can quickly overwhelm their capacity to pay. A lower rate of 12% would match most of our neighboring counties and still provide a meaningful incentive to pay on time without burying homeowners in unnecessary debt.
Earlier, Simpler Repayment Plans
Right now, Erie County offers repayment plans only after the county has foreclosed on the property. Since the county can take years to foreclose, homeowners can be stuck with thousands of dollars of accrued interest. The current repayment plan also requires a large down payment, demands the entire amount within a year, and can only be offered once to a given homeowner. We propose creating a payment that would be
- Offered proactively when a homeowner defaults on their property taxes, to avoid interest piling up
- Available as monthly installments, even without a mortgage
- Described in straightforward terms on the Erie County tax website, which would be restructured to make it more user friendly and easy to navigate
- Allowed for the heirs of an estate, even before the estate proceedings have been filed, to give them the best chance of repaying delinquent property taxes they had no part in neglecting and might not have known about
- Eligible based on the owner and their circumstances, not on whether they or their property have already had a payment plan in the past