How To Pay Property Tax in Texas?
Property taxes in Texas are some of the highest in the USA. And, with taxes due on January 31st as the last day of the grace period – just after the festive holiday season - it’s essential for homeowners to prepare for these costs. The amount owed every year will depend on the assessed value of your property. Penalties for delinquent property taxes in Texas will start accruing from February 1st or the second business day in February, should the 31st fall on a weekend. Here’s a guide for property owners on how often property taxes are paid in Texas from American Finance & Investment Company, Inc., (AFIC) the property tax loan specialists.
When Are Property Taxes Due in Texas?
In Texas, the final date for payment of property taxes is January 31 of each year. After this date, penalties and interest will begin to accumulate. Taxing Units in Texas are required to give property owners at least 21 days to pay their property taxes after the original tax bill has been mailed. Therefore, if your tax bill was only mailed after January 10, but if that has ever happened, it is very rare as tax bills generally come out the preceding October. The delinquency date will be postponed. The delinquency date for each property will be printed on the property tax bill, and homeowners should remember that non-receipt of a property tax bill will not exempt them from delinquency penalties. Many property owners aim to pay their property taxes before the end of the year so they can deduct the payments from their federal income taxes.
How is My Property Tax Determined?
Every year the appraisers from the Appraisal District will determine the value of your property. Property owners are then given the opportunity to raise any disputes regarding the value of their property with the Central Appraisal District and, if necessary, with the Appraisal Review Board. Once the tax assessed values are certified, they are passed on to the local taxing units, which will then set their property tax rates and mail out property tax bills to owners.
Property taxes are based on the values calculated by the appraisers. State regulations dictate that all properties must be appraised at 100% of the fair market value as of January 1st. The fair market value is defined as the price the property would sell for under current market conditions.
Unfortunately, this can lead to considerable ambiguity and disputes, as appraisers would have to use their best understanding of prevailing market conditions and certain key characteristics of properties in a specific area in order to arrive at an appraised value. Such considerations may not consider owners’ perceptions of their property’s value or marketability. The important point to remember is that appraisers use a mass appraisal system; they do not conduct an individual appraisal of each home or property. They typically use one of three methods for this purpose:
Income Approach - mainly used for commercial properties, using the income a property generates as the prime determiner of its estimated value. Sales Approach - most often used for condominium and town home complexes. In these cases, where construction style and quality are very similar or even identical across different units, a basic price per foot of sales can be applied. Modified Cost Approach - which is used on single-family residential properties. Properties are split into groups using factors such as geographic location, building material, and construction quality. The costs thus calculated are multiplied by a specific fixed factor for homes in the same group, derived from recent sales of properties in the area. The home is then depreciated from the calculated number based on its age and condition.
Once the appropriate county appraisal district (CAD) has calculated the value of your property, it will send you a Notice of Appraised Value in April. At this point, you have the opportunity to protest if you think the appraised value is too high. After that, the local taxing units will set their tax rates - usually before September 30th each year. You will then receive your tax bill, showing the amount you owe for that year based on the assessed value and the current tax rate.
Your Right Under the Texas Constitution
The Texas Constitution sets out five basic rules for property taxes in the state
- Taxation must be equal and uniform
- Property must be taxed based on its current market value
- Each property must have a single appraised value
- All property is taxable unless the law exempts it from the tax
- Right to reasonable notice of increases in appraised property value
As a Texas property owner, you have the right to insist on equal and uniform taxation, as stated in the Constitution. You also have the right to ensure that your property is appraised uniformly with comparable properties, according to the generally accepted appraisal methods and techniques. You may also qualify for certain exemptions or tax relief, particularly if you are over the age of 65 or disabled.
Furthermore, you have the right to protest your property’s appraised value before an appraisal review board, which should be composed of a group of impartial citizens in your community. You can voice your opinions about tax rates and property assessments in the appropriate forums provided, such as open public meetings. In certain situations, you even have the right to petition certain local authorities to call an election to limit a tax increase.
When Will I Receive My Property Tax Bill?
Property tax bills are sent out from October. So, you should receive yours well in advance of the January 31st deadline. If you haven’t received your property tax bill by December, you should contact your local tax offices for your county. If your mortgage company pays your property taxes on your behalf, they should receive the tax bill and ensure timely payment. If you have multiple properties, all of these properties should be listed on your bill.
How to Pay Your Property Taxes in Texas
Your local tax collection office can give you the exact details of the property tax payment options available in your county. Some county tax offices facilitate online property tax payments through eChecks, debit cards, or major credit cards. Moreover, the tax code permits eligible individuals to benefit from tax deferral (e.g., for those over 65 or disabled), discounts (e.g., early payment discounts in certain counties like Bexar County, Dallas County, El Paso County, and Collin County), and installment payment plans.
It is worth exploring the variety of partial or total exemptions from appraised property values used to determine local property taxes to see if you qualify:
- Residence or Inherited Residence Homestead
- Age 65 or older or Disabled Persons
- Veterans
- Charitable Organizations & Businesses
It is essential to contact your local tax collection office early to talk to them about different property tax payment options and see if you qualify for special payment terms. If they can’t help, we likely can at AFIC. We are property tax lenders who help people with delinquent property taxes in Texas. Click here to see our options for taxpayers.
What Happens if You Don’t Pay Property Taxes?
Texas currently has the 7th-highest property tax rate in the United States, As Texas has no income tax, these funds are critical to providing local services to your community, including funding public schools, libraries, and infrastructure. As a result, you legally have to pay your tax bill. If you do not pay by 31 January, a 6% penalty and 1% interest will be added to your bill on February 1st, for a total cost to you of 7%! These penalties will grow each month, and attorneys hired to collect your property taxes can charge additional penalties of up to 20% of all costs to cover their fees. In most counties like Denton County, Ellis County, Fort Bend County, and Galveston County, the 20% attorney fee is applied to your bill on July 1st.
On 1 January of each year, a statutory tax lien is placed on every property that is lifted when the property taxes are paid. This lien gives the taxing jurisdiction the power to foreclose on your home or property in the event that you default on your property taxes, and sell it to the highest bidder.
If a homeowner passes away and property taxes remain unpaid, it’s important to understand who is responsible for paying property taxes when the owner dies. Responsibility for these taxes can fall to heirs, the estate, or other parties depending on the circumstances.
There is no cap on the penalty fees and property owners will continue to see their penalties and interest rise each month. In the first year alone, penalties, fees, and interest can approach 48%. In the worst case, this could ultimately lead to losing your property to foreclosure, destroying your hard-earned equity.
What Should I Do if I Can’t Pay My Property Taxes in Texas?
If you receive your property tax bill and are unable to pay your delinquent taxes, it is important to act quickly to minimize your costs. There are a number of options available to you, but not all of them are beneficial.
If you’re facing challenges with property taxes, it’s essential to understand how to avoid property tax foreclosure in Texas. By exploring options such as tax deferrals, exemptions, and property tax loans, Texas homeowners can address delinquent taxes proactively. These strategies not only help prevent foreclosure but also offer manageable ways to handle financial obligations, protecting your property and peace of mind.
You could decide to make late payments, provided you are prepared to pay the penalties and interest. If you are over 65 and your property is a personal homestead, you may qualify for a tax deferral, meaning that you will not be charged any late fees. However, you will still accrue some interest as long as your outstanding balance is not settled. Alternatively, you can make a payment arrangement with your tax authority. Payment plans may appear tempting, but remember that you will probably have to make a hefty down payment and then equal monthly payments for up to 36 months or as short as even 12 months. If you should default at any point during the plan, you will be charged retroactive penalties.
The most affordable and convenient option is to apply for a Texas property tax loan from AFIC. Here is what you need to do:
Well before the deadline of 31 January(and even later if you missed the opportunity), speak to AFIC about a home property tax loan. Our compassionate and experienced team is ready to assist you by providing you with a structured property tax loan designed to work with your financial situation. The earlier you contact us, the better we can help you.
We offer our clients an affordable, hassle-free way to ensure that your account with the local government tax office is paid in full and will work out an easy repayment plan for you. AFIC can provide you with a quotation within a minute by completing the form on our homepage. We can help you pay off your delinquent taxes and offer you the following benefits:
- Quick, online process
- No money down
- No credit check
- Free 30-day rate match
- Avoid high penalties and foreclosure
To get help paying your property or real estate taxes before you incur penalties, contact us today or get a loan estimate by completing the form below.
