If you are a property owner in Texas, ensure you pay property tax in time. While the average tax rate is 1.69% against the 1.07% average in the U.S., some cities like El Paso have tax rates that surpass the 2% mark. El Paso has an effective property tax rate of 2.24%.
Generally, Texas is among the states with the highest property taxes. Unfortunately, you also stand to suffer the most stringent consequences for failing to pay your taxes. Here’s a more detailed discussion on what happens to Texas property owners who don’t meet their property tax obligations.
Consequences of Not Paying Property Taxes in Texas
What if I do not pay my Texas property taxes? What should I expect?
Penalties and Interest Will Start Accumulating
Texas property tax bills are mailed in November. Property owners get them in a few weeks and have up to 31 January to pay. Even if you don’t receive your property tax bill, you will still be required to pay due taxes. Property owners are therefore required to be proactive about property taxes as opposed to sitting and waiting for a bill that isn’t forthcoming.
If tax bills aren’t paid by 31st January, penalties start accruing on 1st February. A 7% penalty is charged on overdue property tax as well as a 2% interest that accrues monthly.
Example: If you owe $10,000 in property taxes and don’t pay by 31st January, your tax bill on 1st February will include a 7% charge ($700), resulting in a total tax bill of $10,700 in February. A 2% interest charge will also be applied cumulatively every month. In March, total penalties and interest will be 9%.
The charges will keep increasing by 2% i.e., 11% in April, 13% in May, etc. In July, a 20% collection/legal fee is applied. While interest increases by 1% instead of 2% thereafter, by December, the total penalties and interest will be 47% + of the original tax bill.
Lien on Property & Foreclosure
Overdue property taxes almost always results in a lien on a property as per Tax Code 32.01. When this happens, the taxing authority has the right to take over property and use it as collateral for overdue taxes.
What follows is a tax sale to recover taxes and accrued interest and penalties. Overdue property taxes are declared delinquent if they remain unpaid on 1st February. On delinquency, tax authorities are at liberty to begin foreclosure as per Texas Tax Code 33.41. Property owners who don’t contest a foreclosure or pay overdue taxes and accrued penalty and interest charges risk losing their property.
Courts can listen to valid defenses to stop foreclosure. However, a judgment must be entered. If the judgment is against a property owner, their property will be auctioned. If the property doesn’t sell in an auction or tax sale, it becomes the property of the county. Other attempts will be made to sell the property.
Before a tax sale, property owners must get a written notice delivered via mail or personal delivery. Tax sale notice guidelines are highlighted in Tax Code 34.01. For instance, tax sale notices must be published on a local daily/newspaper or posted publicly if a county doesn’t have a newspaper.
Stopping Foreclosure on your Texas Property Because of Overdue Property Taxes
It is possible to stop taxing authorities from selling your property by simply paying the amount of tax you owe and accrued charges (penalties and interest).
I don’t have money. How do I pay for property tax in Texas? If you don’t have money, you can consider taking a property tax loan. Texas has good property tax loan lenders like PropertyTaxLoanPros.com who offer quick, affordable loans to every type of distressed property owner, including those with bad credit and economic difficulties.
Getting Your Foreclosed Property Back
Texas Property Tax Code: 34.21 gives Texas property owners the chance to redeem property that has already been foreclosed due to overdue taxes. Property owners have two years from the time a deed has been filed to look for money and buy back the property. However, they must cover all property costs incurred by the new buyer.
Generally, the amount paid for the house, deed recording fee, penalties, interest, taxes paid by the purchaser, and a 25% redemption fee must be paid back. Given how tax sales work, you should expect to pay more if you let your house be foreclosed. The importance of seeking property tax loans early can’t be overlooked.
A good lender like PropertyTaxLoanPros.com can offer property tax loans at a very low cost compared to what you will incur if you allow foreclosure and then buy back your property. Paying off overdue property taxes cures off delinquency, stops foreclosure, and removes the tax lien. However, you won’t incur any penalties or interest charges if you borrow early.
Lawsuit
You can get sued for failing to pay your property taxes on a variety of property types in Texas. Before you think lightly about the phrase “what if I do not pay my Texas property taxes”, think about legal fees and court costs that will add to your overall costs. A lawsuit usually precedes foreclosure. For mortgaged property, you can be left vulnerable to higher monthly repayments if your mortgage company decides to settle the tax bill.
State Solutions to Overdue Property Taxes
Texas Law has some solutions for unpaid property taxes. The state allows 3rd party lenders to take on property tax lien and repay overdue taxes and other charges (penalties, interest, and legal charges).
In fact, seeking the assistance of a Texas property tax loan provider is the best solution when you are faced with difficulties paying overdue tax. Property owners shouldn’t wait for delinquency or state solutions when it’s too late.
PropertyTaxLoanPros.com offers quick property tax loans ensuring taxes don’t become overdue. What’s more, the lender doesn’t discriminate. All borrowers are welcome, including those with bad credit scores. Client evaluations are also holistic, and payment plans are flexible.
Most importantly, there are no application fees, and the monthly repayments are low. Applications are also fast, and funds are disbursed in record time. With lenders like Property Tax Loan Pros, defaulting on your Texas property tax obligations shouldn’t be an option! Call: 866-531-7678 or email – info@propertytaxloanpros.com.
