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Auction pressures property owners to pay overdue taxes

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The overdue taxes owed on just three properties in Franklin could help pay for most of the annual paving and crack-sealing work the city wants to do.

That’s why the county will have a tax sale again this year, to try to collect about $1.9 million in past-due taxes owed to local governments.

Properties in the tax sale this year include small pieces of land, homes, businesses and vacant lots in subdivisions. For example, a person owes $150 in overdue taxes for a driveway to a home in Nineveh. A homeowner is past due $5,000 for a home in the Carefree subdivision in the Center Grove area. About $20,000 is owed by a company for part of a business complex at State Road 135 and State Road 252 in Trafalgar.

When property owners don’t pay their taxes, that’s money county, city and town governments, fire districts and libraries have to do without. For example, Franklin is waiting to collect more than $400,000 in taxes that are overdue on three business properties. If the city got all of those past-due taxes, it could help pay for one year’s paving, Franklin Mayor Joe McGuinness said.

“The tax dollars we collect are going right back into services,” McGuinness said. “When someone even misses a small payment, it could be $2,000 or $3,000 or $5,000, that forces us to trim back even more.”

For the fourth year in a row, the number of properties eligible for tax sale decreased. About 300 properties are listed in the annual sale this year, totaling $1.9 million in unpaid taxes. Last year, 450 properties were on the list.

In order to be included in a tax sale, the owner of a property must not have paid property taxes for at least 18 months. If an owner doesn’t pay, a bidder can purchase a tax lien on the property, meaning the owner would then need to pay the past due amount to the winning bidder plus interest. If the original owner doesn’t pay after one year, that bidder could get a deed for the property and take ownership of it.

The largest amount the county is trying to collect is about $257,000 for the former Red Carpet Inn site near Interstate 65 in Franklin, which has been listed in the tax sale for multiple years. That’s an increase of about $40,000 since last year, and the large overdue-tax bill makes it hard to get a developer interested in the highly visible lot, McGuinness said.

If the someone buys the property, Franklin would get the past-due taxes and hopefully new taxes from a restaurant, hotel or business that would be built on the vacant ground, McGuinness said.

Most of the $1.9 million in past due taxes will get paid before the sale on Sept. 12, often with people mailing checks or dropping off payments the day before the auction, Johnson County Treasurer Diane Edwards said.

Once the taxes are paid, the property is removed from the sale listing. For the past two years, only about 100 properties from the lists compiled in July actually go to auction in the fall.

“It’s like people hold on and wait until the last minute to pay their taxes,” Edwards said.

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