Paying your Property Taxes in Texas

Taxing units usually mail their tax bills in October. Tax bills are due upon receipt and the delinquency date usually is Feb. 1. If Feb. 1 is drawing near and you have not received a tax bill, contact your local tax offices. Failure to receive a tax bill does not affect the validity of the tax, penalty or interest due, the delinquency date, the existence of a tax lien or any procedure the taxing unit institutes to collect the tax.

Your tax bill may include taxes for more than one taxing unit if these taxing units have combined their collection operations. Both the property owner and the owner’s designated agent must be mailed tax bills. If your mortgage company pays the property taxes on your home, the mortgage company will receive the tax bill.

If you ask for one, the tax collector must give you a receipt for your tax payment. Receipts are useful for federal income tax purposes, for ensuring that your mortgage company has paid the taxes on your home, and your tax receipt is evidence that you paid the tax if a taxing unit sues you for delinquent taxes.

You must pay your property taxes by Jan. 31. Taxes that remain unpaid on Feb. 1 are considered delinquent. Penalty and interest charges are added to the original amount.

Most property owners pay their property taxes before the year’s end, so they can deduct the payments from their federal income taxes. Property taxes you pay in 2018 and future years will remain deductible. The only exception is that beginning with tax year 2018; you can only deduct the first $10,000 of your combined property taxes on your Income Taxes.

Failure to Pay Your Property Taxes

You will have penalty and interest charges added to your taxes. If taxes go delinquent, the tax collector adds a six percent penalty and one percent interest on Feb. 1. Penalty continues to accrue at one percent per month until July 1. On July 1, the penalty becomes 12 percent. Interest will be charged at the rate of one percent per month, with no maximum.

Private attorneys hired by taxing units to collect delinquent accounts can charge an additional penalty of up to 20 percent to cover their fees. If the delinquency date is postponed, penalties and interest begin accruing on the postponed delinquency date.

The tax collector will send you at least one notice that your taxes are delinquent. They often send additional notices and warnings.

You may have the option to set up an installment plan. Some tax collectors will allow you to pay delinquent taxes in installments for up to 36 months. They are not required to offer this option except on a residence homestead. Before signing an installment agreement, you should know that the law considers your signature an “irrevocable admission” that you owe all the taxes covered by the agreement.

The tax collector’s last resort is to take a delinquent taxpayer to court. Yu will be sued in court for delinquent taxes. The Judge could order a judicial foreclosure. Court costs will be added to the delinquent tax bill. Each person who owns taxable property on Jan. 1 is liable for all taxes due on the property for that year. A person who owned taxable property on Jan. 1 can be sued for delinquent taxes even if the property has been sold or transferred since then.

Each taxing unit holds a tax lien on each item of taxable property. A tax lien automatically attaches to property on Jan. 1 each year to secure payment of all taxes. This tax lien gives the courts the power to foreclose on the lien and seize the property, even if its ownership has changed. The property then will be auctioned, and the proceeds used to pay the taxes. As a result of the tax lien, someone who purchases real estate cannot obtain a clear title until all the delinquent taxes owed on the property are paid in full. There are redemption rights if the property does get foreclosed upon depending if it is homesteaded or non-homesteaded.

Waiver of Penalty and Interest

Texas Tax Code Section 33.011 requires or allows taxing units to waive penalties and/or interest in specific circumstances. In most instances, however, you must pay the tax no later than the 21st day after you know or should have known of the delinquency and you must request the waiver before the 181st day after the delinquency date.

Check with your taxing authority for the specific waivers they offer. The burden of proof is on the home owner to be eligible for the waivers.

Eligible Military Personnel Payment of Delinquent Taxes, Tax Code Section 31.02 allows eligible military personnel serving on active duty during a war or national emergency to pay delinquent property taxes on property in which the person owns an interest without paying additional penalty or accrued interest. The delinquent taxes become due 60 days after the earliest of the date the military member is discharged from active service; returns to the state for more than 10 days; returns to non-active duty status in the reserves; or the war or national emergency ends.