I had a client of mine reach out to me recently to let me know that they were sooooo generous, that they paid real estate taxes to St. Louis County on a home that we had sold earlier in the year.Kidding, of course. They did pay the taxes but it was in error.
St. Louis County sent my client a tax bill for the property that they had sold a few months ago instead of the new owners. Typically, the Buyer of a new property pays the entire balance of tax due at the end of the year. (Read the quick lesson below to understand why the Buyer pays all of the tax.)
Quick lesson on Real Estate Tax
The Seller/previous owner of a property will credit a Buyer an amount that is representative of the amount of tax they would have owed for the time that the Seller owned the property.
Example – if a homeowner sells a home as of June 30 (i.e. they owned the property 6 months out a 12 month year), then they reduce the amount owed to them at closing by exactly half of the total tax that will be due for that year. In other words, the Buyer brings less money to the closing table to account for the fact that they will have to pay the entire balance of real estate taxes owed at the end of the year.
You Paid in Error, Now What?
Step 1: take a deep breath. It’s going to be OK.
Step 2: Contact the County to see if your payment was processed. If not, request they cancel the transaction.
Step 3: If the County has already processed your payment, gather the documents you received at closing and in the mail from the title company where you closed on the sale of your property. You will need this as proof you have sold the property.
At this point, the County may not have updated their records to reflect the change in ownership and it’s critical that you have sufficient evidence to show the sale.
Step 4: You should immediately call the St. Louis Department of Revenue at 314-615-5500 to let them know that this was an error. You need to be prepared to show them the documentation of your sale. Oh, and please be cordial and patient. These folks are people too and are doing their job as best they can.
Happy Ending
My client was able to get their money back as St. Louis County was very responsive to the issue. They want to ensure the appropriate owners are billed for and pay the taxes and that my clients got their money back. I imagine this probably doesn’t happen too often and but if this scenario or something like it happens to you, make sure you gather the facts and are cordial to everyone you speak with at the County.