Five-Year Payment Plan
This plan may be available to taxpayers who have been in default for less than five years. However, it is not available for taxpayers who are late on their current year taxes.
If you are in default on your prior-year taxes, you can elect to pay your defaulted taxes in installments. The deadline to set up a five-year payment plan is 5 p.m. on the last business day of the fifth fiscal year after the property originally became tax-defaulted. For example, if you defaulted on your taxes on June 30, 2017, you would have until 5 p.m. on June 30, 2022, to set up a payment plan (2017 + 5 = 2022).
After that five-year mark, our office has the power to sell the property at our annual property tax sale, according to state law.
Payments made while on the payment plan are not refundable. If you are due any refund for any year, we will put the refund toward the payment plan. The refund will be treated like any other payment that is made during the plan.
Starting a Payment Plan
To start a payment plan, you must do ALL of the following:
- Complete, sign and return the Five Year Payment Plan Contract to the Tax Collector's Office prior to the deadline.
- Pay at least 20% of the total amount, plus all other current year taxes due and a $94 fee. (This fee is comprised of a $76 plan setup fee and an $18 redemption cost fee)
NOTE: Starting a payment plan will not stop a foreclosure action by a mortgage holder or holder of a Deed of Trust. It is your responsibility to contact your bank or mortgage company about a separate payment plan. Also, a payment plan does not stop your property from being foreclosed on for delinquent debt service obligations under the Improvement Bond Act of 1915 and/or the Mello-Roos Community Facilities Act of 1982.
To remain in good standing, you must:
- Pay at least 20% of the redemption amount, plus all interest, all current year taxes, and the $81 maintenance fee by April 10th each following year.
Each year after the plan's start, the total amount paid must be equal to or greater than 20% of the original redemption amount, plus all interest that has accrued on the unpaid balance. The unpaid balance of your installment plan, plus accrued interest, may be paid in full at any time before the fifth and final payment would be due.
Defaulting on Your Payment Plan
You will default on your plan if you fail to pay the minimum due or fail to pay current taxes each year on or before April 10th, and you will again be charged the penalties on your full defaulted taxes beginning with the original default date.
An installment plan CANNOT be restarted in the same fiscal year in which it defaulted. An installment plan also CANNOT be restarted if the property has become subject to our office's annual tax sale.
If eligible, you can start a new installment plan after July 1st following the fiscal year the plan defaulted. The "default credit" (money previously paid while on the payment plan) cannot be used to start a new payment plan. That amount will be deducted from the balance after the initial 20% has been applied.
A new installment plan MAY be initiated:
- Only after July 1 following the default of the plan.
- All conditions of the installment plan must be met.
An installment plan MAY NOT be initiated:
- After the fifth year following the declaration of tax default.
- After the property has become subject to Power to Sell.
Five-Year Payment Plan FAQs
Am I eligible for the five-year plan? :
If your taxes have been in default for less than five years from the original date of default, then you are eligible to set up an installment plan of redemption.
However, if you were on a five-year plan that defaulted this fiscal year, you cannot start a new plan. A payment plan cannot be re-started the same year it defaulted. It also cannot be started on a property in its sixth year of default or older, or one that is subject to our office's power to sell.
For example, if your original “tax default date” was June 30, 2017, you would add 5 years to determine the last day you can set up a payment plan (June 30, 2017 + 5 = June 30, 2022).
June 30, 2022, is the last day you can set up a payment plan.
Are my current year taxes included in the five-year plan? :
No. Current taxes are separate from the plan and must be paid separately. If the current taxes are not paid by April 10th each year, the five-year plan will default. When setting up a payment plan, your current taxes must be paid in full.
Can the current taxes be put on a five-year plan? :
No. This plan is available only for prior-year, defaulted taxes.
How much do I have to pay to start the five-year plan? :
The minimum amount required to start the five-year plan is 20% of the defaulted total amount due up to the month you set up the payment plan. You'll also have to pay a $76 setup fee, an $18 TTC redemption cost, and all unpaid current year taxes.
Do I have to sign anything? :
Yes, you will need to complete and sign a five-year payment plan contract. Please read the explanation and agreement carefully. The payment plan must be set up by the homeowner, or in the case of a trust or company, by an authorized person. Additional documents may be required.
If you choose to start a payment plan, sign and date the agreement form. Return it to our office with your check for the initial 20% payment for prior-year defaulted taxes, $76 setup fee, and $18 TTC redemption cost. The signed agreement form must be received before we can start the plan. You may also have to pay any current year taxes in order to set up a payment plan.
Does accrued interest stop when I start the five-year plan? :
No. Accrued interest of 1.5% of the unpaid balance is added on the first day of each month after the initial payment.
Here's an example of how the interest is calculated:
|Total Redemption Amount:||$4,702.50|
|20% Payment ($4,702.50 x 20%) =||$ 940.50|
|Remaining Unpaid Balance:||$3,762.00|
|Interest is 1.5% per month of the unpaid balance.
1.5% x $3,762.00=
$56.43 per month
How often do I make payments? :
At least once a year. Your annual 20% payment of prior year taxes plus accrued interest and a $81 maintenance fee are due no later than April 10th of each year, plus current year taxes must be paid no later than April 10th of each year while on the five-year plan.
How much are the payments? :
The payments are 20% of the original TOTAL AMOUNT DUE for the month in which you started the plan (not 20% of the unpaid balance) plus the interest that has been added since the date of the last payment. A notice will be mailed to you each March showing the minimum amount due. If you do not receive this notice prior to April 1st , contact this office for the current amount due on your payment plan and current year taxes. Failure to receive the reminder notice does not provide a basis for delayed payment, waiver of interest, and/or reinstatement of a defaulted pay plan.
Can I pay more often than once a year?:
Yes. You can make a payment as often as you like, but each payment must be at least the amount of the interest that has accrued since the date of your last payment, plus one month of interest. Total payments for each fiscal year must equal at least 20% of the original TOTAL AMOUNT DUE plus interest.
Will the taxes still show as delinquent while I’m on the five-year plan?:
Yes. The parcel will be listed on the defaulted tax roll until it is paid in full.
Q: What happens if I can’t make the payment on time? :
A: The five-year plan will default, and the account will be recalculated to reinstate penalties on the total amount of defaulted taxes beginning with the original date of default to present. A new five-year plan can be started at any time after the beginning of the next fiscal year (July 1st) and before the earliest delinquency becomes five years old. For example, if the earliest delinquency is for the 2008-09 fiscal year, the original date of default was June 30, 2009, and charges were transferred to the defaulted tax roll on July 1, 2009. The five-year plan can be set up at any time on or before June 30, 2014. The “Default Credit” (money previously paid while on the payment plan) cannot be used to start a new payment plan. That amount will be deducted from the balance after the initial 20% has been applied.
Q: Does my mortgage company have to accept the Five Year Plan? :
A: Check with your mortgage company to be sure they will accept it. Establishment of a five-year installment plan of fedemption will not stop a foreclosure action by a mortgage holder or holder of a deed of trust. It is the taxpayer’s responsibility to notify the mortgage company or financial institution that a payment plan has been established.
Q: Can my property be foreclosed on while I am on the Five Year Plan?:
A: It is important to note that if your prior year tax bill includes special assessments for the repayment of debt service obligations under the Improvement Bond Act of 1915 of the Streets and Highways Code, and/or special taxes for payment of debt service on bonds issued pursuant to Mello-Roos Community Facilities Act of 1982 (CFD’s), the installment plan of redemption does not prevent or delay foreclosure action on behalf of the bondholder pursuant to Section 53356.1 (a) of the Government Code.
Four-Year Escape Tax Bill Payment Plan
The Treasurer-Tax Collector sends escape tax bills when your assessment has changed and was not included on your regular property tax bill.
Why would you receive an escape bill? Click here for an explanation.
Some escape bills may be eligible to be paid on a four-year payment.
To enroll a bill on the four-year plan, you must meet the following criteria:
- Escape tax bill must be for a previous fiscal tax year.
- The total amount due must be greater than $500.
- Submit a completed and signed Four Year Payment Plan Agreement before April 10th or by the extension date listed on the coupon, whichever is later.
- Pay at least 20% of the escape bill and all other taxes that are currently due, if any, no later than the deadline for filing the written request.
- Pay the $71 payment plan setup fee.
- If you do not pay your scheduled installments when due or other secured property taxes when due, the plan will default, and you will be charged penalties just like all other delinquent taxes. The tax plus the penalty will be due immediately.
- In each succeeding year, a payment of at least 20% of the original amount, plus a maintenance fee of $76, is required by April 10th.
You will default on the plan if any of the following happens:
- 20% installment not received by April 10th each year
- Maintenance fee of $76 not received with installment payment
- Current year taxes not paid in full by April 10th each year
- All Secured property tax bills not paid on time
- The property with the escape bill changes ownership