• Land taxes generate revenue for city and county governments.housing expenses image by Pix by Marti from Fotolia.com
  
  Land taxes are a form of ad valorem tax imposed by local governments as a way of collecting revenue for the government. The value of your land is assessed by the government and taxes are levied according to the assessed value. Each city and county has a millage rate that is used to factor how much tax is due on land and property. The value of the land is multiplied by the millage rate to figure the total land tax due by each landowner minus any applicable deductions. Failure to pay land taxes can result in penalties, including fines and interest or forced sale of the property through a tax auction.
  
  

Change of Use Penalties

• Farmland is often taxed at a lower rate.A landscape scene of field at a farm image by Francois du Plessis from Fotolia.com
  
  In many states land that is used for agricultural purposes is taxed at a lower rate than land developed for residential or commercial purposes. This rate remains in effect so long as the land is being used to produce crops or for timber or pasturage.
  
  If land that is assessed as agricultural is sold or developed for other purposes, the tax assessment can change and tax penalties may be applied. According to the Maine Department of Administrative and Financial Services, penalties assessed from a change in land use can include payment of the difference between the assessed value as farmland and the value at which it would have been assessed otherwise plus interest.
  
  

Late Payment Penalties

• Each year city and county governments create a proposed budget for the next year. Tax millage rates for land and property are established as part of this process to estimate expected revenue income. Landowners are mailed an assessment of the taxes due on their property stating how and when payments are due. Many locations offer the option of paying the tax in two payments instead of one large payment.
  
  Penalties for filing and paying land and personal property taxes after the due date can include interest charges, making the amount due even larger. According to the Floyd County, Virginia, Treasurer's Office, in this jurisdiction a late penalty of 10 percent begins to accrue the day after the tax payment deadline.
  
  

Tax Auctions

• If all other attempts to collect land or property taxes due fail, the county government has the option of assigning the property to its attorney for tax foreclosure. The owner of the property is notified of the assignment and the attorney files a complaint with the court. The property owner has 30 days from the date the sheriff delivers the summons to respond.
  
  If the complaint is not answered by the landowner to pay the taxes due, the government attorney will petition the court for a judgment of sale. According to the Durham County, North Carolina, government website the property is then offered at auction to the highest bidder. The property owner can still redeem his property after a tax auction by paying the tax due plus all the other charges accrued as part of the foreclosure process.