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 accumulating interest and property tax penalties on their delinquent accounts. The penalties on the outstanding balance accumulate steadily until July 1, when the biggest penalty of the year is placed on all delinquent property tax accounts 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.
Countdown to July 1: Penalties for Late Property Taxes Before the Deadline
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 About Delinquent Property Tax Penalties
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Interest never stops, 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 penalties 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 make other arrangements if you are unable to pay.
What Are the Penalties for Unpaid Property Taxes After July 1?
As of July, delinquent property tax penalties increase sharply when most local tax assessors refer unpaid accounts to attorneys, triggering steep legal collection fees. Under Texas law, a 20% collection penalty may be added for legal expenses, attorney fees, and court costs, raising the total July 1 penalty to 26.6%, or $2,660 per $10,000 owed. By this point, your tax bill may have accrued nearly 42% in interest, penalties, and fees. After July, an additional 1% interest continues to accrue monthly on the base tax amount as well as an additional .2% in collection penalty(ies).
As shown in the graphic below, the increase in charges from February to July is steep. When combining all penalties, interest, and collection costs, a taxpayer’s total delinquency could reach up to 48% within the first year.
How to Avoid Becoming Delinquent on Your Texas Property Taxes
Most property owners don’t plan to fall behind on taxes, but life happens. Understanding how to prepare and respond early can help you avoid costly penalties altogether. Here are some proactive tips: 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.
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Set Calendar Reminders: Property taxes in Texas are due by January 31 each year. Set reminders in December and early January to avoid missing the deadline.
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Check Your Escrow Account: If you have a mortgage, confirm that your lender is paying your taxes on time through escrow.
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Track Your Property Value Notices: Review your annual appraisal notice for errors. Over-assessments can lead to higher taxes and unnecessary burdens.
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Request a Payment Plan Early: Some counties offer limited installment plans before taxes become delinquent. Applying before February 1 can reduce penalties.
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Budget Throughout the Year: Divide your estimated tax amount into monthly savings installments so the full amount isn’t a shock.
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Talk to a Lender Before You’re Late: If you foresee difficulty paying, contact a property tax lender like AFIC early—before penalties begin to stack up.
Taking these steps can help protect your home or business and reduce financial stress before it starts.
How to Settle Delinquent Property Taxes Quickly and Avoid July Penalties
In addition to the rapidly increasing penalties, your property could be foreclosed upon at any point in the delinquency process. In the end, unpaid property tax on a residential, commercial, or rental property will result in a lawsuit. In addition to adding court costs and legal fees to an already rising balance, the lawsuit puts property owners at serious risk of foreclosure and property loss at auction.
While these consequences can be intimidating to think about, there is a light at the end of the dark property tax tunnel. 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.
