Penalties for Late Property Taxes in Texas After July 1
The deadline for annual property taxes is January 31st. If this deadline is missed, property owners face rapidly mounting interest and penalties on their unpaid property taxes. These charges increase month by month until July 1, when the largest penalty of the year is added in accordance with Texas property tax laws. The graph below illustrates the total penalties a delinquent property taxpayer will be liable for within the first year. In this blog, we will discuss how the penalties and interest are added to delinquent property tax accounts, as well as the huge collection penalty that is added on July 1.
What Are the Delinquent Property Tax Penalties Before July 1?
In Texas, the tax due for the current tax year is generally payable by January 31. Local taxing authorities determine the tax amount based on the assessed value of the property, as outlined in official notices and bills sent to the taxpayer by mail or electronically.
If a property owner fails to pay by the due date, the taxes become delinquent as of February 1, and late payment penalties are immediately applied.
Here’s how the penalty structure works before July 1:
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February 1: A 6% penalty and 1% interest are applied to the unpaid balance.
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March through June: An additional 1% penalty and 1% interest are added each month, resulting in a combined 2% increase per month.
By June 30, a delinquent taxpayer may owe approximately 15% more—10% in penalties and 5% in interest—on top of the original tax amount.
Key Reminders:
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Interest compounds daily, and the longer the tax remains unpaid, the greater the financial burden.
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If you experience a hardship, you may be eligible for a deferral, a reduction in your payment, or an installment plan.
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Some penalty for late filing or late payment may be waived if there is reasonable cause and not willful neglect.
To avoid escalating charges, it’s essential to pay your taxes on time or notify your tax collector or county treasurer within 60 days if you are unable to pay.
What Happens if You Do Not Pay Delinquent Property Taxes By July 1?
The penalties for delinquent property taxes substantially increase as of July. This is because local tax assessors send delinquent accounts to their attorneys, who charge steep collection fees.
Texas property tax laws mandate that if property owners have neglected to pay their delinquent taxes by July 1, a 20% property tax collection penalty may be imposed for legal expenses, attorney fees, and court costs on the full balance owed. This means that the total July 1 penalty to you is 26.6%, so you could owe an additional $2,660 for every $10,000 in unpaid property tax. By July, your delinquent property tax bill will have accumulated nearly 42% in cumulative interest, penalties, and fees. After the exorbitant July penalty, your tax bill will continue to accumulate a 1% fee on the unpaid base levy every month.
As detailed in the graphic below, the jump in penalties from the first month of delinquency to July (month 7) is substantial. Taking all of the penalties, collection fees, and interest charges into account, delinquency charges for taxpayers could potentially reach 48% within the first year.
The Fastest Way to Settle a Delinquent Property Tax Before July 1st
In addition to the rapidly increasing penalties, your property could be foreclosed upon at any point in the delinquency process. Ultimately, unpaid property tax on a residential, commercial, or rental property may result in a lawsuit. In addition to adding court costs and legal fees to an already rising balance, a lawsuit could put property owners at risk of foreclosure and lead to property loss at auction.
While these consequences can be intimidating to think about, fortunately, there’s a solution available. By paying the outstanding property tax amount (and accumulated penalties) in full, any foreclosure processes will stop.
Texas property owners can receive help from a reputable property tax lender, like AFIC, thanks to a law that allows third-party lenders to be assigned the county property tax lien and pay off all overdue taxes, interest, penalties, and legal fees.
About AFIC
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.
