62,000 Detroit Properties Owing $326 Million In Taxes Going To Auction
Wayne County has begun notifying 62,000 owners of Detroit properties their properties are slated for tax auction. Owners must pay their unpaid tax bills or agree to payment plans. In Detroit alone, the county hopes to collect on $326.4 million in taxes.
Nearly 37,000 of those properties are occupied residential properties.
Wayne County is required under Michigan law to charge up to 18 percent interest on the tax debt. Nearly $100 million of the $326.4 million Detroit debt is interest, other fees or unpaid water bills.
Furthermore, most tax-delinquent owners facing foreclosure enter payment plans. 34,000 property owners of the 56,000 properties that faced foreclosure last year avoided foreclosure by acting early. They also negotiated payment plans with the county.
The county also faces an issue of absentee investors. Absentee investors buy the property at tax auction then rent the property out and not pay taxes. The investors then buy the property back at auction for one-tenth of what they owe. Investors then repeat the cycle. In addition, absentee usually do not inspect the property until after winning the auction. If the investor doesn’t like what he sees he will abandon the property.