Researcher: JS Page 1 3/25/25
OLR Bill Analysis
sSB 1316
AN ACT REDUCING INTEREST DUE ON CERTAIN DELINQUENT
MUNICIPAL PROPERTY TAXES.
SUMMARY
This bill reduces, from 18% to 12%, the annual interest rate on
delinquent property taxes when a municipal tax collector files a lien on
the property and assigns the lien (i.e. sells it to an outside party).
Currently, delinquent property taxes generally accrue interest at a rate
of 18% per year.
By law, an assignee of a municipal tax lien (i.e. party who bought the
lien) has the same powers and rights as the municipality and its tax
collector would have if the lien had not been assigned. Under current
law, this includes charging the 18% annual interest rate. However, for
assignments executed on or after July 1, 2026, and beginning on the date
a lien is assigned, the bill reduces this amount to 12% on the delinquent
portion of the principal of the assigned taxes.
By law, the interest rate on other delinquent taxes and assessments is
linked to the interest rate municipalities charge on delinquent property
taxes (e.g., sewer assessments, special taxing district taxes, and special
assessments on blighted housing). By lowering the delinquent property
tax interest rate for properties with assigned liens, the bill also
potentially reduces the interest rate charged on these other delinquent
taxes and assessments when the lien is assigned.
EFFECTIVE DATE: October 1, 2025
BACKGROUND
Related Bill
SB 1339, favorably reported by the Banking Committee, also reduces
the interest rate on these assigned liens to 12% and, among other things, 2025SB-01316-R000207-BA.DOCX
Researcher: JS Page 2 3/25/25
additionally caps certain attorney’s fees associated with them.
COMMITTEE ACTION
Planning and Development Committee
Joint Favorable
Yea 20 Nay 0 (03/07/2025)