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How Much Do I Really Pay in Penalties & Interest if I Don't Pay My Property Taxes?

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Texan property owners are mostly well aware of the fact that they face some of the highest property taxes in the country. However, the tax rates themselves pale in comparison to the bill you will have to deal with if your property taxes become delinquent. Aside from being penalized for your failure to pay, you will also be charged interest on the outstanding amount for as long as the bill remains unpaid. This can soon add up to unmanageable debt.

Penalties on Delinquent Property Taxes

“Penalties” on your tax bill come in one of three forms: actual penalties, interest, and legal collection costs. Interest is 1.0% a month or 12.0% per year, on your base tax bill outstanding every month until the bill is paid in full. Penalties are 6% on February 1st, 1% on the first of March, April, May, and June, with a final 2% penalty on July 1st. This means you’ll pay 12% in penalties in only six months. Legal collection costs can vary by jurisdiction. The most common approach is the maximum allowable by law, which is 20% on the entire balance owed (inclusive of penalties and interest), with the first collection costs occurring July 1st. That means on July 1st, there are collection costs of 23.6% of your base tax bill, and you will have incurred 41.6% of your bill in “penalties” by that date. Every month after July 1st, your penalties increase by .2% of the base bill, representing 20% of the 1% in monthly interest. Between collection costs and interest, you are paying 14.4% annually for your unpaid property taxes.

The exact penalties levied against overdue tax bills differ between tax districts. On average, you will be hit with a 6% penalty on your original tax bill if it remains unpaid by the beginning of February. If the bill remains unpaid until June 30th, an additional 1% in interest will be added to the month’s total. In a mere five months, if your bill still remains unpaid, you will have increased your outstanding tax bill by an incredible 38%!

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Texas property tax rates are high enough as they are. These additional costs can make property owners’ tax bills soar out of control in a very short period. Therefore, it is a much better option to make arrangements to pay your taxes as soon as possible. If you don’t have the cash flow to pay it, apply for a Texas property tax loan instead. This will settle your debt with the tax authorities immediately and allow you to pay back the loan in a way that will suit your budget.

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.


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Proudly Serving Austin (Travis County & Williamson County), Dallas (Dallas County), El Paso (El Paso County), Fort Worth (Tarrant County), Houston (Harris County, Fort Bend County, & Montgomery County), the Rio Grande Valley (McAllen, Pharr, Hidalgo County, & Cameron County), San Antonio (Bexar County), Waco (McLennan County) and the rest of Texas with Property Tax Loans.

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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