As a proud homeowner or commercial building owner in Texas, you enjoy some of the lowest income tax rates in the country. However, that means Texas cities, counties, and school districts charge some of the highest property tax rates in America.
When an unexpected layoff, medical crisis, or inflationary surge strains your monthly budget, it can be tough to keep up with yearly property tax bills.
Unfortunately, when you fail to pay your balance, the law empowers taxing units to pursue you with an aggressive collection scheme.
The consequences begin immediately and can escalate to the loss of your home if you don’t understand the timeline, know your rights, and take advantage of relief programs.
When Are Property Taxes Due in Texas?
Texas Tax Code establishes January 31 as the due date for property taxes each year. Since January feels far away, here’s what happens behind the scenes.
During the first six months of each year, local appraisal districts assess your property value, and tax assessors bill you each October. The bills are dated when sent but are not considered delinquent until midwinter.
You can pay your Texas property taxes anytime between October 1 and January 31 without penalty. Taxes become delinquent on February 1.
Are You Behind on Property Taxes? Act Now to Avoid Foreclosure
The majority of tax appraisal offices offer payment plans or informal installment agreements if you call before February 1. But programs differ by county, and failure to pay one installment will often void the agreement immediately due to penalties.
What Happens After You Miss a Property Tax Payment?
On January 31, your balance is due. If you haven’t paid, taxes become delinquent on February 1, and penalties accrue:
- Texas wants you to pay as soon as possible, so they tack on a 6% penalty and 1% interest charge the moment your taxes become delinquent.
- For each month you remain delinquent, your penalty increases 1% while interest increases by 1%.
- If your property taxes are still unpaid by July 1, your penalty will be capped at 12%, but your interest charge will grow by 1% per month until you pay your bill.
July 1 marks another critical date in the collection process. On this date, local taxing units are authorized to assign delinquent accounts to debt collection attorneys.
When this occurs, they can tack on another collection penalty of up to 20% of the tax, penalty, and interest balance to cover attorney fees.
You can see how quickly your tax bill grows if you only miss one payment. Your total bill will increase by more than one-third within five months of missing the deadline.
Can Someone Put a Lien on Your House If You Owe Taxes?
Yes. Texas law requires every property to have a tax lien recorded on January 1 each year. The lien is attached to your property to secure the payment of ALL taxes assessed that year.
The tax lien attaches before you even receive your tax bill, so you don’t have to do anything for the county to put one on your home. The tax lien is automatically perfected, and the county does not even have to file paperwork with the county clerk.
If you are ever late on your mortgage payments, the lender will most likely pay your taxes and add that amount to your monthly mortgage bill. This is because the tax lien takes priority over every other lien on your property except for the first mortgage.
Tax liens take priority over:
- Mechanics’ liens
- Judgment liens
- Mortgages (except the first mortgage)
You cannot sell or refinance your home until you pay off a tax lien, since title companies will not insure your property over an active tax lien. Second mortgages cannot be approved for the same reason — their investment is subordinate to the tax lien.
Can the Government Foreclose on Your Home for Non-Payment of Taxes?
Yes. The Tax Code is clear that failure to pay taxes shall constitute a cause for foreclosure.
Although Texas uses a judicial foreclosure process rather than selling tax certificates like some states, the end result is the same. If you don’t pay your taxes, you can lose your home.
Your local taxing units (school district, city, county) must file a civil lawsuit against you in the county district court, asking for a judgment against you for the past-due taxes.
The lawsuit asks the court to order the property sold at public auction to pay your taxes.
The taxing units will serve you with an official citation that notifies you of the lawsuit. You have the right to contest the lawsuit by filing an answer and appearing in court.
If the judge grants the tax units a judgment, the property will be scheduled for sale by the county sheriff or constable at a sheriff’s sale on the first Tuesday of the month.
If this happens, you will receive at least 21 days’ notice before the sale occurs. You will be personally served with the original citation when the lawsuit is filed.
If the court grants a foreclosure judgment, a written notice of the impending sheriff’s sale will be posted at the courthouse and published in the local newspaper for three weeks straight before the sale date.
Texas law allows homeowners to redeem their property after the sale occurs. If the home is your homestead or land you use for agriculture, you have TWO YEARS to redeem the property.
What this means is that you can buy your home back from the winning bidder. If you redeem the property during the first year, you must pay the purchaser 125% of what they paid at auction.
If you wait until year two, you must pay them 150%. Non-homestead residential properties and all commercial properties only have 180 days to redeem and only pay 25% penalties.
How Long Does Foreclosure Take in Texas?
Property tax foreclosure in Texas varies from county to county. Some counties won’t even file a lawsuit until several years down the road; however, larger counties like Harris, Dallas, or Bexar will often jump right into litigation within six months of the July 1 attorney fee penalty.
Property owners are entitled to due process under the law, so you will receive at least 21 days from the date of service to file an answer to the lawsuit.
Once a judgment is entered, there is a lot of leeway as to how long the sheriff can take to actually schedule the sale. This varies widely but is often no less than 180 days.
Are Property Taxes Tax Deductible?
Property taxes are deductible on federal income taxes as an itemized deduction.
Can Texas Take Your Property If You Miss One Payment?
Yes. Your taxes become delinquent on February 1 and are subject to foreclosure immediately.
Can You Lose Your Home Because of Back Taxes?
Unfortunately, yes. Tax foreclosure is the last step in the collection process if you refuse to pay or cannot negotiate a payment plan.
What Do I Do If I Can’t Pay My Property Taxes?
There are several ways to navigate high property taxes and avoid foreclosure under Texas Law.
Request Quarterly Installment Plans
Senior citizens over age 65, disabled homeowners, and disabled veterans who qualify for a residence homestead exemption are entitled to make four equal payments of their current taxes without penalty or interest.
Property taxes are due in installments of one-fourth on October 1, January 31, April 30, and June 30.
To use this program, you must apply by March 1.
Tax Deferrals
Texas homeowners 65 and older or who are disabled can apply for a tax deferral which prevents any further collection action while you own and occupy the home.
The taxing unit cannot continue with the collection lawsuit, demand payment, or conduct a foreclosure sale as long as the affidavit is on file.
However, this doesn’t mean your taxes go away. They will continue to earn interest at 5% per year, and the full balance is due 181 days after you sell or die.
File All Available Homestead Exemptions
The residence homestead exemption lowers the taxable value of your property and lowers your tax bill. Check with your appraisal district to ensure you’ve applied for all exemptions you qualify for, including age 65, disability, or disabled veteran exemptions.
Get a Property Tax Loan
There are several private companies that will loan you money to pay off your back taxes. It will stop the county from foreclosing, but it doesn’t exactly solve your problem. The loan company essentially takes the government’s place in line with the tax lien position.
These loans usually come with high-interest rates and closing costs, but can provide you with time to figure out your next move.
File a Property Tax Protest
Finally, if you cannot pay your taxes because they are too high, you might be able to win a tax reduction by protesting your property taxes with your local appraisal district.
All homeowners have the right to protest their property value each year in April. A lowered appraisal translates to lower taxes, and a successful protest can save you money each year on your property taxes.
Property Tax Management Quick Quiz
Take a minute to answer these questions to see if you’re managing your property correctly.
- Did you file for your Texas Residence Homestead Exemption this year?
- Is your property valued more than similar homes in your neighborhood?
- Did you review your appraisal notice for mathematical mistakes or incorrect square footage? Yes No
If you answered “No” to Question 1 or “Yes” to Questions 2 and 3, you’re probably overpaying on taxes and should consider filing a property tax appeal.
How Can You Stop Tax Foreclosure in Texas?
If you receive notice that a delinquent tax lawsuit has been filed against you or your property is scheduled to be sold at sheriff’s sale next month, you must act fast.
The easiest way to stop the sale is to pay the back taxes, penalties, interest, and any accrued court costs before the auction date.
Your second option is to contact the attorney handling the collection matter on behalf of the taxing units immediately and request a formal installment agreement.
Taxing units can grant installment payments on delinquent taxes up to 36 months for homestead properties under the Texas Tax Code. Once you sign the agreement and make your first payment, the lawsuit or sale will typically be postponed as long as you make your payments and stay current on future tax bills.
The last thing you can do to prevent tax foreclosure is to make sure your property is valued correctly.
Although tax protests are typically due May 15 for the tax year in question, lowering your overall value with a successful property tax appeal is one of the most effective proactive strategies for keeping your property taxes affordable and avoiding future delinquency.
Tips to Prevent Delinquent Property Taxes
The best way to avoid falling behind is to prevent delinquency before it starts. Taking a few simple steps can help ensure your property accounts stay current year after year.
Open a Mortgage Escrow Account
One of the best ways to avoid property tax surprises is to open an escrow account with your mortgage lender. With an escrow account, the bank sets aside money from each mortgage payment into a separate account and pays your taxes each December.
This ensures you’re never hit with a giant bill during the holidays.
Review Your Annual NOAV each Spring
NOAV stands for Notice of Appraised Value. This is the document you receive each year from your appraisal district telling you what your property is worth.
Don’t wait until October when your bill arrives to panic about how much you owe. By the time you receive your bill, it’s too late to do anything about the value.
If your property was arbitrarily raised or is significantly higher than comparable properties selling in your neighborhood, you should begin preparing your property tax appeal now.
Work with Hegwood Group, a professional property tax consulting firm in Dallas, to maximize your chances of winning a reduction. Our team has access to exclusive market data and will represent you during your appraisal review board hearing.
Call On Hegwood Group | Expertise You Can Count On
Dealing with rising property appraisals and avoiding costly penalties for delinquency can be difficult for any Texas homeowner or commercial property owner to manage on your own.
At Hegwood Group, we understand the burden that increasing property taxes can cause and are committed to helping you navigate local market trends, discover hidden appraisal errors, and manage the appeal process from start to finish.
Our property tax consultants will go over your property with a fine-tooth comb to ensure you’re being fairly taxed on your Texas home. Contact our property tax consulting firm to see how we can help you with your next property tax protest.
Frequently Asked Questions
Q. What if I miss the Texas Property Tax Deadline?
If you miss the January 31 property tax deadline, your taxes become due on February 1. You will immediately be assessed a 6% penalty and 1% interest. Penalties and interest increase each month, and on July 1, your account may also be assigned to a collection attorney. If so, they can charge you a collection fee of up to 20%.
Q. How long can you go without paying property taxes in Texas?
Technically, there is no time limit. As soon as your taxes become delinquent on February 1, your local taxing units can file a lawsuit. Some counties won’t file for years, but larger counties in Texas will often rush to file a lawsuit within six to twelve months of the July 1 attorney fee penalty.
Q. Can you go to jail for not paying property taxes?
No. Failure to pay your property taxes will not get you sent to jail. Property taxes are a civil debt, not a criminal offense. If you don’t pay, the government can only charge you fees, attach a tax lien to your property, and foreclose on your house through a civil lawsuit.
Q. Will not paying property taxes hurt my credit?
Your county will not report your delinquent taxes to the credit bureaus, but if a tax foreclosure lawsuit is filed against you, that may show up on your background check or criminal history. Likewise, if your mortgage lender pays your taxes to protect their lien on the property, it will hurt your loan.
Q. Can seniors delay property taxes?
Yes. If you are a Texas homeowner over 65, you can file a tax deferral affidavit with your local appraisal district. This will stop tax collection lawsuits and foreclosure sales against you, but it does not forgive your taxes. They will continue to accrue 5% interest per year until you sell or die, and the home changes ownership.
Important Note: The information provided in this article is intended for general discussion purposes only. Readers should consult a qualified property tax consultant for accurate and personalized advice regarding property taxes, as this article should not be relied upon as a substitute for professional guidance.
