A Guide to Delinquent Property Tax Penalties in Texas
Failing to pay your Texas property taxes by January 31 can trigger a cascade of penalties, interest charges, and legal feesr. These costs can quickly escalate and put your property at risk of a tax lien, public auction, or even foreclosure. This guide explains how delinquent property taxes work in Texas, outlines the timeline of penalties, and highlights the most effective solutions to avoid further financial strain.
Understanding Delinquent Property Taxes in Texas
Delinquent property taxes occur when property owners fail to pay by the January 31 deadline. Starting February 1, taxes are considered delinquent and begin accruing penalties and interest each month. A lien is automatically placed on the property by statute at the start of the tax year, giving the county tax assessor-collector legal authority to collect the debt.
If the taxes remain unpaid, the county tax office may initiate legal action that can lead to foreclosure or a delinquent tax sale. To avoid this, property owners should contact the tax office directly to explore payment options such as installment plans. Acting quickly can prevent further costs and protect your property.
Texas Property Tax Penalty Timeline: What Happens After January 31
The penalties for late payment of property taxes in Texas follow a structured schedule:
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February 1: A 6% penalty and 1% interest are applied immediately
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March–June: An additional 1% penalty and 1% interest are added each month
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By June 30: Penalties and interest total 15% of your original bill
On July 1, it gets more serious. The total cost of not paying your property taxes can escalate rapidly. There is a 2% penalty and 1% in interest is applied. Then, in most Texas counties like Dallas, Bexar, and Tarrant, a 20% collection fee for attorney and court costs is added, bringing the total to 41.6% in penalties and interest within just five months of nonpayment. Going forward, an additional 1% interest continues to accrue monthly, meaning, with the 20% collection fee, your balance grows by 1.2% per month.
These charges make it increasingly difficult for property owners to catch up. Without action, a manageable debt can quickly spiral into a significant financial burden. It’s crucial to learn what to do if you can’t pay your property taxes in Texas and understand available solutions to address delinquent taxes effectively.
What Happens if I Don’t Pay My Delinquent Property Taxes in Texas?
If you leave your delinquent property taxes unpaid, two things will happen:
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Your bill will continue to accrue interest and penalties
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Your taxing authority can begin foreclosure proceedings on your tax-delinquent property
In Texas, a tax lien is automatically placed on every property on January 1. This lien is only lifted once taxes for the previous year are fully paid. If they remain unpaid past the January 31 deadline, the taxing authority in your Texas county may lawfully initiate foreclosure. Fortunately, you’ll receive written notice before this occurs and may still take steps to resolve the debt. One effective option is a property tax loan, which allows you to pay off the full amount due, including penalties and interest, and resolve your overdue balance before the situation worsens.
At that point, you typically have two options:
- Pay the full amount owed at the tax collector’s office, or
- Present a valid defense in court to halt the process, of which there are almost none
If no action is taken, the county can obtain a court judgment and sell your property in a tax sale to recover the amount owed. In some cases, Texas provides a legal safeguard called the right of redemption, which allows homeowners to reclaim their property after it’s sold by paying the full balance plus a premium within a specific redemption period.
Texas Property Tax Liens: What They Are and How They Work
A property tax lien is automatically placed on your home on January 1 of each tax year. This lien is not optional and must be satisfied before you can sell or refinance your property.
Key Facts About Tax Liens:
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Tax liens are involuntary and are legally enforceable.
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The lien attaches to your property and prevents transfer or refinance until it’s resolved.
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Unpaid properties may be listed on the delinquency roll of your Texas county’s tax assessor-collector or published in a local newspaper.
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If payment isn’t made, the county may initiate foreclosure and auction the property.
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In order to remove the lien, you must either pay the full amount due, set up an installment plan with the tax office, or use a property tax loan through a licensed third-party lender.
How to Pay Delinquent Property Taxes in Texas
Falling behind on your taxes can result in a lien against the property, growing debt, and loss of your home. Fortunately, AFIC property tax loans offer a practical solution.
Why Choose a Property Tax Loan to Avoid a Tax Sale?
A property tax loan is a fast, affordable way to resolve your delinquent balance:
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Once approved, a licensed third-party lender pays your entire tax bill directly to the county treasurer or tax collector.
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This resolves your outstanding balance with the taxing authority and immediately suspends further collection activity.
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The lien then transfers from the taxing authority to the lender, giving you time to repay the loan on a flexible schedule that fits your budget.
With this option, you avoid having your property listed for public auction and stop penalties from escalating further.
What Happens If You Wait Too Long Before the Tax Sale?
If the taxes remain unpaid prior to the tax sale, your property may be listed for auction by the county clerk’s office. In most cases:
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The property is sold to the highest bidder
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A certificate of sale is issued to the buyer
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The process is conducted under official supervision, with auction details often posted in a list on the county’s website
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To avoid this, paying off your debt before the sale occurs is critical.
Get Help From a Property Tax Lender You Can Trust
American Finance & Investment Co., Inc. (AFIC) offers our clients an affordable, hassle-free way to manage their Texas property taxes and avoid crippling penalties and interest. We can ensure that your account with the local government tax office is paid in full and will work out a manageable repayment plan for you. AFIC can provide you with an instant quote by completing the form on our homepage. For qualifying properties, we can help you pay off your delinquent taxes and offer you the following benefits:
- Quick and completely online process
- No money down
- No credit check
- Free 30-day rate match
- Match competitors and beat their rate by 1%
- Avoid high penalties and foreclosure
We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our property tax loans, please contact our experienced team at AFIC today.
