As any property owner knows, property taxes are an annual expense that goes hand in hand with property ownership. But with the recent COVID-19 pandemic, many Texans may find themselves in the position where paying their property tax bill by the end of January is something they cannot afford.
There are significant consequences for a homeowner who has delinquent property taxes by the delinquency date, both financially and emotionally. Therefore, it is important to know what happens when you cannot afford your property tax as well as to recognize your rights under the Texas constitution, potential exemptions on property taxes, property tax deferrals, protesting your appraisal amount, and what you can do if you are in the position where you cannot afford to pay.
In accordance with the Texas Property Tax Code, falling behind on your property taxes in Texas can lead to penalty fees, interest, and payments which will only increase with time. Starting on February 1st, all counties will charge property owners with delinquent property taxes, 7% in interest and penalties. This increases by 2% every month until July 1st, when most taxing authorities in Texas will hit you with a 20% collection fee, in addition to 3% in penalties and interest.
With no cap on the interest, property owners will have their penalties and interest rise each month. In the first year alone, penalties, fees, and interest due can approach 44%. In the worst case, this could ultimately lead to losing your property to foreclosure, destroying your hard-earned equity. If your municipality seizes your property for a tax foreclosure sale, it will be sold at auction to the highest bidder and the proceeds from the sale will be used to pay your delinquent property taxes, interest, and penalties. The winning bidder (or the county) will then get the deed to your home, subject to the right of redemption. There is a two-year right of redemption for homestead properties and the property appraised as agricultural land. When redeeming your property, you will need to reimburse the highest bidder for the purchase price they paid at the tax sale, as well as the deed recording fee, any amounts they paid in taxes, penalties, and interests on the property. Additionally, you will have to pay a redemption premium of 25% of the aggregate amount if you redeem your property during the first year of the redemption period, or 50% if you redeem your property in the second year.
The tax foreclosure can be stopped by paying the judgement amount at any time before the day of the sale. If the delinquency is resolved, the tax lien that the taxing units placed on your property will be released, and foreclosure will end.
If you believe the appraisal amount was incorrect, you can protest it by filling a dispute with your county appraisal district. Remember, if you are being sued, it is too late to claim overcharging as a defense.
The Texas Constitution sets out five basic rules for property taxes in the state
There are a variety of partial or total exemptions from appraised property values used to determine local property taxes:
Those that qualify for exemptions can see their property tax eliminated or reduced. For those that still owe property tax, one can avoid the repercussions of not paying by getting a property tax loan.
Founded in 1946, American Finance and Investment Company Inc. (AFIC) started by serving the financial needs of El Paso and has since grown to become one of the top property tax lenders in the state of Texas, with a complaint-free track record for over 65 years, with the Better Business Bureau.
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 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:
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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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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