How Detroit homeowners struggling with back taxes can get help

March 29th, 2021
Darius' home in northwest Detroit

Becoming a homeowner before he turned 30 was an important personal goal for Darius.

“My mom died when I was a child and my father wasn’t there for me, so I was determined to be self-sufficient,” Darius said. “My drive to have my own place was part of that.”

Working through a realtor six years ago, Darius found a vacant house in northwest Detroit for a bargain price, even with the $10,000 in back taxes on the house that Darius would have to address. Unfortunately, after his purchase, Darius learned that the house was already in tax foreclosure. Darius managed to keep the house out of the auction and work out a payment plan with the Wayne County Treasurer’s office that he could afford.

Three years later, however, Darius lost his good-paying job at a casino. He eventually gained employment with a suburban high school, but was laid off last year when the pandemic started.

“Because of my loss of income, I couldn’t make the tax payments consistently and I was very worried I would lose my home,” Darius said.

Darius reached out for help, and he was referred to Southwest Solutions’ Homeownership Assistance Team. He began working with Kathy Ralston, Homeownership Preservation Coach. His delinquent property tax balance, with interest and fees, was nearly $16,500.

“We have powerful tools available now to help homeowners like Darius resolve their property tax debt and keep their homes,” Kathy said. “These tools can make a dramatic difference.”

The tools are the Homeowners Property Tax Assistance Program (HPTAP) and Pay As You Stay (PAYS). The HPTAP helps low-income households or those experiencing financial hardships by eliminating or reducing their property tax bill for the current year. An online HPTAP application is now available. The deadline to apply this year is December 13. Applications are processed at an ongoing basis, and eligible homeowners are strongly encouraged to apply early. To determine your eligibility for a full or partial exemption, and to see the documents you need to provide, visit the City of Detroit’s HPTAP page.

PAYS helps Michigan homeowners who have fallen behind on their property taxes stay in their homes. It provides affordable payment plans and eliminates penalties, interest and fees for eligible homeowners. Under PAYS, homeowners pay only their back taxes or 10 percent of the home’s taxable value, whichever is less. To be eligible for PAYS, the homeowner must qualify for the HPTAP for the current year.

After Kathy helped Darius qualify for the HPTAP, they worked together on the PAYS submission. Under his PAYS terms, Darius owed less than $500 to clear up the delinquent taxes. By paying this amount all at once, Darius received a discount. In total, Darius paid only $332, thus saving more than $16,000

“Kathy worked so hard on my behalf, and I’m forever grateful,” Darius said. “A huge burden has been lifted.”

Keleci is another Detroit homeowner whom Kathy helped with HPTAP and PAYS. Keleci acquired his home as gift about seven years ago. Like Darius’ home, Keleci’s already had significant back taxes that needed to be resolved. Keleci started monthly making payments through a plan set forth by the Wayne County Treasurer’s office. But then Keleci’s life took a difficult turn.

“I got very sick for over a year, couldn’t work and fell into a bad state,” Keleci said. “I couldn’t make the property tax payments. The interest and penalties grew fast and I fell further and further behind to point where it seemed hopeless.”

Keleci’s delinquent balance stood at about $27,000 last year. Under PAYS, Keleci only needed to pay $1,300 to eliminate his property tax debt. He paid this amount in a lump sum, thus saving nearly $25,700.

“I feel like I have been given a new start in life,” Keleci said.

Despite the great benefit that HPTAP and PAYS can make for struggling homeowners, too many Detroit homeowners are failing to take advantage of this important opportunity.

A recent report from the Quicken Loans Community Fund shows that nearly 9 of 10 Detroit homeowners in tax delinquency qualify for the HPTAP under the income guidelines. However, more than half are unaware of the exemption, which again is the first step for PAYS.

If you are a Detroit homeowner who owes back taxes and has qualified for the HPTAP, you can easily see what your PAYS options are by checking the Payment Plans page of the Wayne County Treasurer’s website.

Now there is even greater incentive to apply for the HPTAP and PAYS. It’s called the Detroit Tax Relief Fund, and it will wipe out back taxes for about 20,000 eligible Detroit homeowners who qualify for the HPTAP and PAYS. This opportunity comes from the extraordinary generosity of the Gilbert Family Foundation and Rocket Community Fund, which recently announced a $15M commitment to establish the Detroit Tax Relief Fund. The program is administered by Wayne Metro. Please call 313-244-0274 or visit this page on the Wayne Metro website to learn more.

If you need to apply for the HPTAP, Southwest Solutions is one of the community organizations that can help you. Go to our Home Services page, click the Home Preservation menu, choose  “I own and occupy a home in Detroit and need property tax assistance,” and then register so we can contact you.






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