If you own a property in Texas, you have likely felt the weight of annual property taxes. Texas property taxes are known to be high and unavoidable in owning property in the Lone Star State.
Many Texas homeowners find it challenging to pay their property taxes on time and in full – leading to delinquency, whether for financial, personal, professional, or other reasons. But how long can you be delinquent on your property taxes in Texas? What happens if you don’t pay? Can you lose your house or property if you don’t pay your property taxes? We will answer these questions in this blog.
Delinquent taxes are defined as the cumulative amount of unpaid taxes, assessments, recoupment charges, penalties, and interest charged against a property.
The definition of tax-delinquent property is any property on which the taxes levied and assessed by any party remain in whole or in part unpaid on the date due and payable.
So, in short, delinquent property taxes are all unpaid property taxes (whether it be the whole amount or just a portion thereof), as well as any penalties, interest, or fees that have accumulated, which are still outstanding after they become due.
Texas property tax bills are mailed out in October every year, and payment is due upon receipt. However, at the absolute latest, property owners have until January 31 of the following year to settle their tax bills in full before they are considered delinquent. February 1 is regarded as the delinquency date, meaning that any properties with unpaid taxes from this date are considered delinquent until the balance due is settled.
Local governments in Texas rely heavily on property tax revenue. Therefore, the ramifications for delinquency are severe:
Penalties and Interest for Unpaid Property Taxes: On the first business day in February and a penalty charge of 6% of the original tax amount, as well as a 1% interest charge, will be added to all delinquent property tax bills. For every month that the property taxes remain delinquent thereafter, an additional 2% will be added to the bill before the biggest penalty of the year is added in July. After that, penalties and interest will continue to accrue typically at 1.2% per month until the delinquent property tax bill is settled in full. It is recommended to investigate the exact amount of penalties and interest you will be subject to in order to fully grasp the seriousness of delinquency.
Tax Lien Foreclosure: Another significant repercussion of not paying your property taxes is foreclosure. In accordance with Chapter 32 of the Texas Property Tax Code, on January 1 of every year, a tax lien is attached to every property with outstanding taxes in order to secure payment. Any properties with outstanding property taxes after the delinquency date are, therefore, vulnerable to foreclosure through a tax sale. If you don’t pay off the overdue amounts or have a valid defense against the foreclosure, the court will enter a judgment against you. The county will then enforce that judgment by selling your property at auction. A home that does not sell at the tax sale will be “struck-off” to the county, meaning that the county will own it and attempt to sell it at a later date.
A taxing authority is allowed to start foreclosure proceedings at any point after your taxes become delinquent (Texas Tax Code § 33.41). Therefore it is best practicable to cure delinquency as soon as possible. Before your property can be foreclosed upon, you will be given a written notice of the sale.
A Notice of Tax Sale must be delivered before a tax sale and is typically delivered personally or in the mail. It will include the sale date, time, and location of the sale in accordance with Chapter 34 of the Texas Property Tax Code. The notice is also published in a newspaper or posted publicly if there is no newspaper in your county.
While property owners can redeem their properties at any time up to two years after the deed is filed in county records, no property owner wants to go through the hassle of foreclosure. By paying off the judgment before the sale, you can cure the delinquency and stop the tax foreclosure. Clearing your delinquency will release the tax lien from your property and stop the foreclosure process, as outlined in the Texas Tax Code (§ 33.53.)
No one wants to face foreclosure proceedings and the loss of their home, but if you are delinquent on your property taxes, there are a few ways you can combat the foreclosure process.
As Occam’s Razor states, the simplest solution is almost always the best. The simplest solution to stopping foreclosure and ending delinquency is to pay your property tax burden. Settling your delinquent balance will remove the lien from your property and stop the accumulation of penalties and interest.
Texas offers a tax deferral to seniors over 65 who owe payments on their homesteads. Applying for an over 65 tax deferral will immediately stop the foreclosure process. While taxes cannot be avoided, late fees will be stopped, and interest will be reduced. Certain disabled property owners may also qualify for the property tax deferral program.
Some tax collectors offer payment plans that allow property owners to pay delinquent taxes in monthly installments. The tax assessor is required to offer payment plans only under certain conditions and circumstances; when they do, the timeframe is usually not very long. Property owners who are able to pay off their taxes in one year or less can benefit from payment plans. However, this option may no longer be available if the foreclosure process has already started. To determine if payment options are available, you will need to speak with the tax assessor or their attorney.
Paying your property taxes and any penalties and interest right away is the best option to protect your home from foreclosure. One of the easiest ways to do this is with a property tax loan.
While a property tax loan may sound strange, property tax loans can give you a bit more financial freedom. A property tax lender will immediately pay off all the penalties, interest, and administration fees associated with your property tax bill and the original amount. This will stop delinquency and any foreclosure proceedings. The interest rates from a property tax loan will typically be much less in comparison to the sky-high penalties you accumulate on a delinquent property tax bill.
American Finance & Investment Co., Inc. (AFIC) is an OCCC-registered property tax lender. We offer our clients an affordable, hassle-free way to manage their Texas property taxes. 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:
We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our property tax loans and any additional advice on the requirements of your local tax authorities and the details of your property taxes, please contact our experienced team at AFIC today.
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APR between 8.0% and 25.0% for loan terms between 12 and 120 months. For example 8.5% APR, $25,000 loan, $750 in Closing Costs, 120 Monthly Payments of $303.32.
YOUR TAX OFFICE MAY OFFER DELINQUENT TAX INSTALLMENT PLANS THAT MAY BE LESS COSTLY TO YOU. YOU CAN REQUEST INFORMATION ABOUT THE AVAILABILITY OF THESE PLANS FROM THE TAX OFFICE.
If you are over 64 or disabled, don’t get a property tax loan, contact your tax office about a deferral.
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