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Property Tax Delinquency and the Number of Payment Installments

Paul Waldhart and Andrew Reschovsky

May 2012, English

At a time when property tax delinquencies are rising and property tax revenues are falling in many parts of the United States, it is particularly important to consider the potential impact that property tax administration has on reducing delinquency. In particular, reducing the amount of money a taxpayer must pay at any given time may reduce the rate of property tax delinquency.

This study investigates the relationship between the number of annual payment installments and the property tax delinquency rate using multivariate regression techniques and five years of data from Wisconsin municipalities. The results of the analysis indicate that increasing the number of installment payments from two to three per year reduces the delinquency rate by nearly half. Allowing more than three installments, however, does not lead to a statistically significant reduction in the property tax delinquency rate.