Understanding Property Tax Deferrals: A Complete Guide
A property tax deferral is a program that allows qualifying homeowners in Texas to postpone paying their property taxes on their principal residence. Authorized under Texas Property Tax Code Section 33.06, this deferral is typically available to individuals who are 65 years or older, disabled, or serving in military personnel programs. While the deferral pauses tax collection efforts, it does not eliminate the tax obligation. A lien is placed on the property, and interest accrues at 8 percent annually until the full amount is paid. This guide explains who qualifies, how the program works, what happens when it ends, and what options are available if you can’t repay the deferred balance.
Who Qualifies for a Property Tax Deferral Program in Texas?
In Texas, the property tax deferral program is designed to assist individuals who may be most impacted by rising property taxes on their principal residence. Homeowners who are 65 years of age or older, disabled, or serving in the military personnel program to defer taxes may be eligible for deferral consideration under Texas Property Tax Code Section 33.06.
To qualify, the property owner must occupy the real property as their primary residence and file a formal deferral request with the county tax office. While the program allows homeowners to delay the payment of their property taxes, it’s important to note that the deferral program does not exempt taxes — they are simply postponed.
The taxpayer claiming the deferral must continue to meet eligibility each year, and the deferral status can be revoked if the property is sold or no longer used as the principal residence. For homeowners unsure whether they qualify for the senior or military program, AFIC can assist by reviewing eligibility and explaining how a loan for deferred taxes may be used to bridge financial gaps.
Understanding Tax Liens and Interest During a Deferral
Many homeowners mistakenly believe that deferring property taxes means avoiding all financial obligations — but that’s not the case. When a deferral is claimed, the taxes don’t go away. Instead, the deferral loan is recorded as a lien against the participant’s property, and interest shall accrue beginning May 1 of the year the taxes are deferred.
The Texas Property Tax Code establishes that 8 percent interest is charged annually on the deferred tax amount, even if payments are postponed. Over time, the accrued interest is not paid until the deferral ends, at which point the full balance becomes due — including all tax and interest.
The lien ensures that taxing authorities maintain a legal claim on the real property, which allows for collection once the property is sold, or the homeowner no longer meets the deferral eligibility. At AFIC, we help homeowners understand this obligation clearly. If you need to defer your property taxes but are concerned about long-term costs, our team can discuss financing strategies to help you manage both the lien and interest effectively — without risking foreclosure.
What Happens When a Texas Property Tax Deferral Ends?
A deferral will be terminated when the person who qualified for the deferral no longer occupies the property due to the house being sold or inherited. The deferred taxes and accrued interest must be paid in full on or before the 181st day after the date the qualified person no longer owns or occupies the property.
With effect from the 181st day, the entire amount becomes due; therefore, taxing units can proceed with collection actions, including foreclosure. Should there be an outstanding mortgage, check with your mortgage company that the deferral doesn’t violate the terms of the deed of trust. If the home has a mortgage and the taxes aren’t paid on time, the deed of trust may allow the mortgage company to enforce its default remedies which may include foreclosure.
As a leading property tax lender in Texas, AFIC is here to assist with tax deferrals, for senior homeowners over 65, disabled tax deferrals as well as the tax deferral affidavit for Appreciating Residence Homestead Value.
Can’t Pay Back Your Deferred Property Taxes? Here’s What to Do!
Deferred property taxes are due to be paid within 180 days after a house is sold or changes ownership. At American Finance & Investment Co., Inc, we are here to assist you in understanding your repayment options. In certain circumstances, the sale price of the home can cover the deferred taxes. Should you inherit a home with deferred taxes, or you want to avoid deferment altogether, our friendly team is available to assist you.
How AFIC Can Help
As one of the leading property tax lenders in Texas, 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 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 property 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 Texas property tax deferrals or our property tax loans, please contact our experienced team at AFIC today.
