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The End of the Tax Road

An article in Friday’s Newport Daily News, by Marcia Pobzeznik, touches on a topic that most folks never think about:  tax sales.  Apparently, Tiverton now, technically, has control of 20 parcels of forest off Crandall Road on which the owners owe taxes.

Through an annual tax sale, the town auctions off such properties.  The process is meant to create an investment for the new buyers and incentive for the former owners to pay the taxes.  The winning bidder pays the town for the overdue taxes and holds the property.  The prior owner can redeem it within six months by paying the taxes plus 10%.  After that, the percentage goes up by whatever percentage the winning bidder had put forward when buying the land, as low as 1%.  After a year, the winner can foreclose.

In July, 170 properties were slated for tax sale, owing a total of $274,000 in taxes; by the time of the auction, that had fallen to 23 owing $30,000, most of which didn’t receive any bids.  After a year, anybody can pay the taxes and foreclose.

To be sure, the town requires some mechanism to collect taxes owed, but the tax rate of the town has an obvious effect.  According to Tax Collector Toni Lyn McGowan, the taxes owed at tax sale typically represent two-and-a-half years of unpaid taxes.  Not long ago, the $30,000 owed at the sale would have been more like $15,000, making them easier to pay off for the owner or the tax sale bidders.

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Justin Katz

Justin Katz is a writer and researcher focusing on Rhode Island policy and politics. For more about Justin, see our About page. justin@justinkatz.com (401) 835-7156.

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