One church congregation is finding out that a recent land purchase might not be the deal it thought it was.
For $25,000, the Set Free Deliverance Church purchased two parcels of land from the city of Dallas for the construction of a new building, but due to unforeseen back taxes, it turns out the property could cost the church closer to $200,000, according to CBS Dallas.
Because the property failed to be sold at a Sheriff's auction after it was foreclosed on, it was offered by the city at an especially attractive price to Reverend Morris Rolfe and his daughter Annie, who were in charge of the purchase. The Rolfes say they received verbal confirmation from the city that there would be no additional taxes, but later found out the property was subject to as much as 20 years worth of “post judgment” taxes, or taxes accrued after foreclosure.
The situation may be a rare one in the murky and often complicated field of property taxes, especially those related to foreclosure.
Dallas Councilman Scott Griggs is pursuing having the city forgive the taxes -- one possible option, but it seems an unlikely one, considering the potential beneficiaries of the money, which include the school district and collection agent, according to CBS Dallas.
Those losing property can also face tax trouble. Unpaid taxes can trigger foreclosure, but even if homeowners emerge from foreclosure with their tax or mortgage loan debt reduced, Uncle Sam can still reach for a piece of the pie.
Up until 2007 and the Mortgage Forgiveness Debt Relief Act, debt forgiven as part of foreclosure or a short sale could be counted as income and taxed accordingly, CNNMoney reports. The relief expires at the end of this year, though, so those facing imminent mortgage trouble are advised to expedite the process, according to the Los Angeles Times.
Clarification: The headline originally stated the church owed $170,00, which is obviously not a number. The missing zero has been found.