Detroit Loophole Skips Property Taxes
The ailing city’s residents have found an interesting way to avoid paying their property taxes. If their properties go into foreclosure, they buy them back from the county for $500.
We know what you’re thinking – what?! But we are telling you the truth!
There have been several property owners that have avoided up to $600,000 in liens and property taxes by letting multiple properties fall into foreclosure. Then, they buy their same properties back at auction.
Some of the property owners are investors and landlords while others are people who simply can’t afford their taxes but don’t want to have to move permanently out of their homes.
Apparently, according to The News, about 400 separate properties will be able to eliminate almost $5 million in taxes and liens by going through this process.
Though this might be an effective way to avoid paying property taxes, it is in no way advisable according to experts. In fact, it can be quite a risky practice in many cities. In Detroit, people are able to successfully get away with this because many people have moved out of the city and there are very few people to even bid against them.
It isn’t just investors and landlords taking advantage of this Detroit loophole. Non-profit organizations are also taking part in the hope of helping impoverished homeowners remain in their homes.
Currently in Wayne County there are over 40,000 property owners – 90% of them in Detroit – facing foreclosure due to unpaid property taxes. Who knows how many will take advantage of this loophole to keep from having to move out.
Jon HuserBack to all blogs
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