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What is a Tax Lien Foreclosure?

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A tax lien foreclosure is when the government forecloses on a property because the owner has failed to pay their property taxes. Texas has some of the highest property taxes in the country, resulting in many people not being able to afford to pay. When a property owner in Texas fails to pay what they owe, the government enforces their tax lien. The lien serves as a legal claim against the property for the unpaid amount the owner owes in taxes.

A property with unpaid taxes can’t be refinanced or sold by the owner until the outstanding taxes are paid. If left unpaid, the home could end up in foreclosure, negatively impacting a person’s credit score.

Things you might be surprised to learn about tax lien foreclosures:

  • They can happen over very small amounts of money. When you hear the word “foreclosure” you may think of expensive monthly mortgage payments, but failure to pay your property taxes, even an amount as small as $100, can result in a tax lien foreclosure. As well as keeping up with your property taxes, we recommend ensuring your loved ones are doing the same with their own properties, and everyone should be vigilant about updating their addresses when they move.

  • Once a property owner has a tax lien judgment, the subject property often quickly becomes available for purchase via public auction. There are investors who spend their careers buying up properties with tax liens because these properties can be bought for much less than they are worth, and many public auctions allow online bidding so people from other areas can participate.

  • There is a redemption period. The Texas Tax Code has what’s called the Right of Redemption. Most states give you a chance to buy your property back after a tax lien foreclosure by paying the lien, back taxes, a premium to the buyer, and any other fees. Details vary by property type, so check with your attorney.

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How property tax loans can help you

Our state continues to go through difficult economic and financial circumstances as we reckon with the impacts of COVID-19. If you’ve fallen behind on paying your property taxes, then you know that the penalties and late fees can make your bill even more expensive, creating a hole that’s difficult to dig your way out of. We recommend partnering with a property tax loan company that will help you pay your property taxes so you’re not at risk of a tax lien foreclosure.

Once the tax lien foreclosure process starts, it can be difficult and frustrating to get your property back. There’s a risk that your property will go to auction and be bought by someone else, and while in some circumstances it may be possible to reverse the tax lien foreclosure, it can be a lengthy, expensive process. Rather than risk having your property purchased at an auction, it’s much easier to apply for a property tax loan that allows you to keep your home. Many tax loan companies will work with you to create a solution for your circumstances.

For more information about how American Finance & Investment Company, Inc. (AFIC) can help you pay delinquent properties taxes in Texas, or if you have any questions about property tax loans, please contact us today. We look forward to hearing from you.


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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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