How Long Can You Be Delinquent on Your Property Taxes in Texas?
If you own a property in Texas, you have likely felt the weight of annual property taxes. For property owners in the Lone Star State, Texas property taxes are known to be high and unavoidable.
Many Texas homeowners and other property owners struggle to pay their property taxes on time and in full, often due to financial, personal, professional, or other reasons, which can lead to delinquency. 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? We will answer these questions in this blog.
When Are Property Taxes Considered Delinquent?
Texas property tax bills are typically mailed out in October and are due upon receipt. However, at the absolute latest, property owners have until January 31 of the following year to pay in full. Starting February 1, any unpaid balance is considered delinquent and begins to accrue penalties and interest.
What Happens if You Do Not Pay Your Property Taxes?
Local governments in Texas rely heavily on property tax revenue. Therefore, the ramifications for delinquency are severe:
Penalties and Interest for Unpaid Property Taxes: As of February 1, a 6% penalty and a 1% interest charge will be added to the original tax amount. For the next few months that the property taxes remain delinquent, an additional 1% penalty and 1% interest (2% total) accrue. On July 1, a 20% collection fee is usually added to cover legal and administrative costs. After that, monthly penalties and interest continue to accumulate, often reaching approximately 48% within the first year. Property owners should contact their county tax office to understand their exact liability and avoid further financial strain.
Tax Lien Foreclosure: In accordance with Chapter 32 of the Texas Property Tax Code, on January 1 of each year, a tax lien is attached to every property with outstanding taxes in order to secure payment. If property taxes remain unpaid, this lien may result in foreclosure through a tax sale. If you don’t pay off the overdue amounts or have a valid defense, the court will enter a judgment against you. The county may then enforce that judgment by selling your property at auction. If the home doesn’t sell, it may be “struck-off” to the county for resale.
How Long Can You Go Without Paying Your Property Taxes Before Foreclosure?
The Texas Tax Code § 33.41 allows tax authorities to initiate foreclosure at any point after taxes become delinquent, but the timing varies. Some taxing entities may wait months or even years, while others act more quickly, sometimes within a few months of the due date. Since a tax lien is in place starting January 1, foreclosure is a possibility after delinquency. The longer you wait, the more your debt accrues, increasing the risk of foreclosure. If the tax assessor believes repayment is unlikely, they may move forward with legal action.
If foreclosure is pursued, the taxing unit must first obtain a court judgment. After that, a Notice of Tax Sale will be issued with the date, time, and location of the auction. This notice is delivered by mail or in person, and is also published publicly, in accordance with Chapter 34 of the Texas Property Tax Code.
Although Texas law provides a limited redemption period, usually up to six months after the deed is recorded (longer for homesteads), it’s best to act before the process reaches this point.
What Is a Tax Sale and What Happens to Your Property?
When property taxes remain unpaid and foreclosure has been authorized, the local taxing authority, such as a school district, city, or county, can recover the debt by selling the property at a tax sale.
Tax sales are usually held on the first Tuesday of each month at the county courthouse. The property is sold to the highest bidder, who gains conditional ownership.
However, the original owner may still retain redemption rights, depending on the property’s classification. For example:
- Homestead, agricultural, or mineral properties: Owners have 2 years to redeem the property.
- Other properties (such as commercial or non-homestead residential): The redemption period is 6 months.
To reclaim the property, the owner must pay back all taxes, interest, and fees, plus a substantial premium, as outlined in section §34.21 of the Tax Code.
A tax sale is the final step in the foreclosure process. While it doesn’t happen immediately after taxes become delinquent, it will if the debt remains unpaid. To avoid reaching this stage, act early. Contact your local tax office or consult a licensed property tax lender like AFIC for help.
What Can You Do to Avoid Foreclosure?
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.
Settle Your Property Tax Bill and Any Accumulated Penalties
Paying your tax bill in full is the most effective way to end the foreclosure process. Doing so will remove the lien and stop penalties and interest from accruing.
Get a Tax Deferral
Texas offers a tax deferral for homeowners over 65 or those with certain disabilities. While it doesn’t eliminate taxes, it does stop penalties and reduces interest while pausing foreclosure. However, if you qualify for a deferral, you are not eligible for a property tax loan. Contact your county for eligibility and application details.
Establish A Repayment Plan with the Local Tax Assessor-Collector
Some tax offices allow monthly installment plans, though not all are required to do so. These are typically short-term and may not be available once foreclosure proceedings have started. Contact your assessor’s office to explore this option.
Investigate A Property Tax Loan
A property tax loan can pay off your entire bill, including penalties and fees, halting foreclosure and spreading repayment over time. The interest rates on these loans are often lower than the accumulating penalties. Licensed lenders, like AFIC, offer flexible solutions for property owners in Texas.
About AFIC
American Finance & Investment Co., Inc. 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:
- 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 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.
