Homeowner Nears Retirement, Faces Property Tax Delay and House Sale Dilemma

John Rivera, a 68-year-old homeowner from Ventura County, California, stands at a crossroads. He has fallen behind on his property taxes for the first time in decades, never missing a mortgage payment before. Now close to retirement, he asks if this is the worst moment to sell his house and downsize.

Rivera bought his three-bedroom home 35 years ago. He planned to sell it this year to move into a smaller place near his children in Oregon. But unpaid taxes from the November 1 installment due date have piled up. Normally, those taxes turn delinquent after December 10, triggering a 10% penalty. Rivera says the delay came from unexpected medical bills after his wife's illness last fall.

Background

Property taxes in California split into two payments each year. The first comes due on November 1 and goes delinquent after December 10. The second follows on February 1, delinquent after April 10. Unpaid amounts after June 30 enter tax-defaulted status, with 1.5% monthly penalties added. After five years, counties can auction off the property to recover the debt.

Rivera's area in Ventura County saw major wildfires late last year. Those fires destroyed thousands of homes and forced evacuations. In response, Governor Gavin Newsom issued Executive Order N-10-25 in January 2025. The order suspends penalties, costs, and interest on late property taxes for 2025 in fire-affected zones of Los Angeles and Ventura counties. This relief lasts until April 1, 2026, for most payments. It does not cover taxes already delinquent by January 6, 2025.

State lawmakers took further steps with Assembly Bill 1517, introduced soon after. The bill extends suspensions until April 10, 2026. It halts collection of penalties on installment plans and personal property statements if owners file by that date. These measures aim to help residents rebuild without extra tax burdens. Rivera's property falls within the covered zone, though his taxes went unpaid before the cutoff.

Homeowners like Rivera face liens on their properties once taxes go delinquent. The lien covers not just the tax but penalties, interest, and costs. Tax collectors must send notices before any sale: certified mail 45 to 120 days ahead, and personal notice for primary homes 10 to 120 days prior. Still, the five-year window gives time to pay up or set up plans.

Key Details

Rivera owes about $8,500 on his first installment, due last November. He received his tax bill on time but could not pay amid hospital stays and repairs from smoke damage. A 10% penalty of $850 now applies, plus daily interest. His mortgage stays current, paid through an escrow account that usually covers taxes too. But this year, fluctuations in his fixed income left a gap.

Relief Options for Homeowners

Under the executive order, tax collectors must cancel penalties for late 2025 payments in disaster areas if owners apply and show hardship. Installment redemption plans let people pay over time before a sale looms. Rivera's county offers these, but defaults restart the clock. AB 1517 would pause defaults on plans current through January 7, 2025.

Selling a home with delinquent taxes requires payoff at closing. Buyers' lenders demand clear title, so Rivera must settle the debt from sale proceeds. Real estate agents in Ventura report fewer buyers this winter due to high interest rates around 6.5%. Inventory sits high after fires displaced sellers, pushing prices down 5% from last year.

"I've never been late on a mortgage, so this makes me nervous," Rivera said in a phone interview from his home. "I'm close to retiring, and I just want to get this behind me."

County tax offices report a 20% jump in delinquency inquiries since the fires. Officials urge payments through online portals or in person. Some banks adjust escrow if disasters hit, but Rivera's lender denied his request.

What This Means

For Rivera, selling now clears the tax debt but nets less profit in a soft market. Median home prices in Ventura County hover at $750,000, down from peaks. Closing costs eat 6-8% of that, and taxes take another chunk. Waiting until retirement income kicks in might let penalties grow, though state relief caps them for now.

Broader impacts hit thousands. Over 15,000 properties in the fire zones face similar issues. Suspended penalties save an average household $1,200 yearly. But those outside relief areas, or with pre-2025 delinquencies, pay full freight. National mortgage delinquencies hit 1.3% in 2025, with FHA loans up 26%.

Retirees nationwide rethink plans amid rising costs. Property taxes average 1.1% of home value in California, higher than many states. Rivera's case shows how one setback disrupts long-term goals. He meets a tax advisor next week to weigh options: pay from savings, seek a loan, or hold off on the sale.

Local realtors note buyers favor move-in ready homes without liens. Staging and repairs boost value, but Rivera's fire-related fixes drained funds. If he lists soon, agents predict 30-45 days on market. Delays could push into summer, when rates might ease.

County officials plan workshops on tax relief in March. Homeowners must file property statements by April 10 to avoid extra penalties. For Rivera, timing the sale hinges on tax clearance and market rebound. His retirement dreams depend on balancing these debts with housing needs.