California Five-Pay Plan: Paying Defaulted Property Taxes Over 5 Years

Short answer: yes, California lets you pay defaulted property taxes in installments. The Five-Pay Plan (officially the Installment Plan of Redemption, Revenue and Taxation Code § 4217) spreads the redemption amount over five years. You pay at least 20% to open it, then 20% plus interest by April 10 each year, and you must also keep paying the current year’s taxes. It has to be opened before the county gets the power to sell, which for a home is five years after the default.

This guide covers who qualifies, what it really costs, the mistakes that make plans fail, and how to tell whether the plan or a sale protects more of your equity. For the full five-year timeline from first missed payment to auction, see what happens if you don’t pay property taxes in California.

Who Qualifies for the Five-Pay Plan

Sources: § 4217, the State Controller’s installment plan notice, and the LA County Five-Pay Plan application.

How the Payments Work

1. Opening payment: at least 20% of the redemption amount (all defaulted taxes, 10% penalties, $10 cost per year, the $15 redemption fee and 1.5% monthly penalties to date), plus the county setup fee.
2. Current-year taxes: paid on time. If you open the plan between July 1 and April 10, the current year’s taxes and any supplemental bills must be paid by April 10. If you open it between April 11 and June 30, they must be paid in full first.
3. Each April 10 for four more years: another 20% or more of the original redemption amount, plus interest at 1.5% per month on the unpaid balance.
4. Payoff any time: you can pay the remaining balance plus accrued interest early.

The installment payments never include current taxes. Riverside County’s installment plan page says it plainly: current taxes are always paid separately.

A Worked Example

Say your redemption amount is $20,000 and current-year taxes are $5,000:

Interest on a $16,000 balance at 1.5% a month is about $240 a month. In a typical year you are paying $9,000 to $11,500 to stay on the plan. Your county’s statement controls the exact figures.

Five Mistakes That Default a Plan

1. Forgetting the current-year bill. Missing the April 10 current-tax deadline defaults the plan even if your installment is paid.
2. Supplemental bills. A supplemental assessment that goes delinquent can default the plan. These bills arrive separately, and mortgage impound accounts often don’t pay them.
3. A bounced check. LA County defaults the account automatically on any dishonored payment or stop-payment order.
4. Opening too late. Once the power to sell starts, partial payments don’t stop the auction. LA County says so in its auction FAQ.
5. Assuming it stops special-assessment foreclosure. Riverside County warns that a plan does not stop a Mello-Roos (CFD) or 1915 Act bondholder foreclosure. LA County says the same for its LACEP energy assessments.

Ask your lender before you open a plan, too. Some mortgage servicers treat a plan as not enough and will advance the taxes and add them to your loan.

Other Programs to Check First

• Property Tax Postponement (State Controller). If you are 62 or older, blind or disabled, have household income of $57,002 or less and at least 40% equity, you can defer current-year taxes at 5% simple interest. The 2026–27 filing period runs October 1, 2026 to February 10, 2027. It does not pay taxes that are already defaulted. See the SCO postponement page.
• Disaster tolling. If a declared disaster damaged the home and it hasn’t been substantially repaired, the five-year clock is paused until five years after the damage (§ 3691(a)(1)(A)). Wildfire owners in LA County should ask about this.

Five-Pay Plan vs. Selling: Which Protects More?

A sale doesn’t require you to pay the taxes first. The title company gets the exact payoff from the tax collector, pays it from the sale proceeds at closing, and you receive the rest. See selling a house with delinquent property taxes for how SHH Buys Homes handles it.

Frequently Asked Questions

Can you make payments on delinquent property taxes in California? Yes. Once your property is tax defaulted (unpaid on June 30), you can open an Installment Plan of Redemption, called the Five-Pay Plan, under Revenue and Taxation Code § 4217. You pay at least 20% of the redemption amount up front, then 20% plus interest by April 10 each year, while keeping current-year taxes paid.

When is it too late to start a Five-Pay Plan? You must open the plan before 5 p.m. on the last business day before the tax collector gets the power to sell. For residential property that is five years after the default date; for non-residential commercial property it can be three. After that, the only ways to stop a tax sale are full redemption or selling the property.

What interest does the Five-Pay Plan charge? The unpaid balance accrues interest at 1.5% per month (18% per year), the same rate that applies to defaulted taxes. Counties also charge a setup fee; Los Angeles County charges $75 each time a plan is opened.

What happens if I miss a Five-Pay Plan payment? The plan defaults. What you paid is applied as partial payments, you cannot open a new plan until July 1 of the next fiscal year, and if the property would have reached the power to sell that year you may not be allowed to restart at all (§ 4217(a)).

Does a Five-Pay Plan stop a tax sale? Only if it is opened before the property becomes subject to the power to sell and kept current. Los Angeles County states plainly that once a property is subject to the power to sell, partial payments will not keep it out of the auction; it must be fully redeemed.

Not sure the plan is affordable? Call (626) 414-4859 or request a cash offer. We’ll compare the plan’s real cost with a sale and tell you honestly which one leaves you better off. This article is general information, not legal or tax advice.