Tax Bills & Delinquent Taxes
Texas property tax penalties for late payment are large and it is difficult to obtain a waiver. Texas taxpayers need to carefully monitor and review the tax bills which need to be paid for each property they own. The law does provide limited latitude for having late payments if the appraisal district or the tax entity makes an error which leads to the late payment. However, many tax entities are reluctant to waive penalties and interest, even though they have made obvious errors. Timely payment of Texas property taxes is the best way to avoid penalties. This document was prepared by the Texas Comptroller and is presented for your convenience
Tax Bills & Delinquent Taxes
Taxing units usually mail their bills around Oct. 1.
State law allows taxing units, at their option, to authorize tax collectors to accept one-half of a taxpayer’s taxes by Nov. 30 and the remainder by June 30 without paying penalty and interest. Not all taxing units offer this option.
Tax collectors may also choose to collect partial payments, payments by credit card or escrow payments. Such payments do not forestall any penalty and interest on the unpaid portions.
A homeowner that qualifies for the age 65 or disabled exemption may pay current taxes on his or her home in four installments. The person must pay at least one-fourth of the taxes before Feb. 1. With this payment, the homeowner indicates that taxes are being paid in installments. The remaining payments are due before April 1, June 1 and Aug. 1 – without any penalty and interest. If the person misses an installment payment, a 6 percent penalty and also interest (at 1 percent for each month delinquent) is added to the installment amount.
You must file an Application for Residential Homestead Exemption with the county appraisal district between Jan. 1 and April 30 of the tax year – up to 2 years after you pay your taxes. During the year, if you turn 65 or become disabled, you must apply for the 65 or older or disabled exemption no later than 2 years from the qualification date. Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application. In that case, you must file the new application. If you should move or your qualifications end, you must inform the appraisal district in writing before the next May 1. A list of appraisal district addresses and phone numbers is available online. Here is a list of over 100 Texas appraisal districts’ information.
Delinquent Taxes: Q&A
The deadline to pay is Jan. 31. The tax collector will add penalty and interest charges to taxes that are unpaid on Feb. 1. In rare instances, a taxpayer may have a delinquency date later than Feb. 1 – check with your tax office.
If taxes go delinquent, the tax collector adds a 6 percent penalty and 1 percent interest in February. Penalty continues to accrue at 1 percent per month until July 1. On July 1, the penalty is 12 percent. Interest continues to accrue at 1 percent per month until paid. For example, on July 1, unpaid taxes would have accrued a total of 18 percent penalty and interest (12 percent penalty and 6 percent interest).
To this amount, a taxing unit also may add a penalty of up to 20 percent for attorney fees.
State law requires a taxing unit’s governing body to waive penalty and may waive interest on a delinquent tax if the taxing unit or its agent caused an owner’s taxes to go delinquent. The property owner must pay the tax no later than the 21st day after he or she knows or should have known of the delinquency. The property owner must request the waiver before the 181st day (six months) after the delinquency to receive a refund of the penalty and interest.
State law allows you to request a waiver of penalty and interest on your delinquent taxes if you are in the United States armed forces during a war or national emergency declared in accordance with federal laws. To receive the waiver, you should file a Military Property Owner’s Request for Waiver of Delinquent Penalty and Interest form within 60 days from the earliest date of the following events: (1) discharge from the active military service; (2) return to the state for more than 10 days; (3) return to non-active duty status in the reserves; or (4) the war or national emergency ends.
Taxes that become delinquent on or after Feb. 1, but no later than May 1, and remain delinquent on July 1 of the tax year incur the additional penalty for attorney fees of up to 15 percent. The taxing unit must contract with an attorney to collect delinquent taxes. The tax collector must mail the delinquent taxpayer a notice that the additional penalty will be added July 1. The collector sends the notice no earlier than 30 and no more than 60 days from July 1 – during the month of May. The attorney will pursue collection of the taxes through legal proceedings, if necessary.
Also, the collector that has a contract with an attorney may add the 15 percent penalty to taxes that become delinquent on or after June 1. The delinquent taxes include those under the split payment option, installment payments for over 65 or disabled persons, or taxes on late mailed bills that have a later delinquency date than Feb. 1. The penalty attaches the first day of the first month that begins at least 21 days after the date a notice of delinquency and penalty is sent to the property owner.
No. State law provides that failing to send or receive a tax bill does not affect the validity of the tax, penalty or interest due by an individual, the tax’s delinquency date, the existence of a tax lien or any procedure the taxing unit institutes to collect the tax. Property owners know that property taxes are due each year and should check if they do not receive a tax bill.
You may want to check with your mortgage company to determine if your taxes were paid timely.
Some tax collectors allow delinquent property owners to pay delinquent taxes in installments for up to 36 months. A tax collector isn’t required to offer this option. Before signing an installment agreement, you should know that the law considers the taxpayer’s signature an irrevocable admission that you owe all the taxes covered by the agreement.
Yes. You may “abate,” the delinquent taxes if a taxing unit has filed a suit in district court for foreclosure purposes. If a judgment was rendered, you still may abate the taxes; however, you must do so five days prior to the tax sale.
If you are 65 or older or disabled, you may defer or postpone paying any current or delinquent property taxes on your home for as long as you own and live in it. To postpone tax payments, you must file a tax deferral affidavit with the appraisal district. You may suspend any lawsuit by filing an affidavit with the court. Or, you may suspend a pending sale to foreclose on the homestead’s tax lien, if you file for the abatement up to five days before the date of the sale. The deferral is for all delinquent property taxes owed taxing units that tax the home.
A tax deferral only postpones paying taxes. It doesn’t cancel them. Interest is added at the rate of 8 percent a year. Once the owner no longer owns the home or lives in it, past taxes and interest become due. Any penalty and interest that was due on the tax bill for the home before the tax deferral will remain on the property and also become due when the tax deferral ends. After the tax deferral ends and the taxes remain unpaid, the taxing units may add attorney fees on the 181st day after the deferral and pursue tax collections, past taxes and interest become due. Any penalty and interest that was due on the tax bill for the home before the tax deferral will remain on the property and due when the tax deferral ends. After the tax deferral ends and the taxes remain unpaid, the taxing units may add attorney fees on the 91st day after the deferral and pursue tax collections.
Your surviving spouse age 55 or older may continue to receive the tax deferral if the surviving spouse owns and lives in the home.
A taxing unit may file a lawsuit at any time once taxes on a property go delinquent. The taxing unit’s last resort is taking a delinquent property owner to court. If a delinquent tax suit is successful, the court costs will be added to the delinquent tax bill. Each owner who owns taxable property on Jan. 1 is liable for all taxes due on the property for that year. This means that an owner who owned taxable property on Jan. 1 can be sued personally for delinquent taxes on a property, even if the property has been sold or transferred since then.
Each taxing unit holds a tax lien on each item of taxable property. This tax lien gives the court the power to foreclose on the lien and seize the property, even if its ownership has changed. The property will then be auctioned and the proceeds used to pay the taxes.
Contact your local taxing unit to discuss the specifics of your tax situation.
Yes. A person can redeem the foreclosed property within six months after the purchaser’s deed is filed for record. The old owner must pay the new owner the purchase bid for the property, plus recording fees, amount of any taxes, penalties, interest and costs on the property, plus 25 percent of the aggregate total. If the property was a residence homestead or land designated agricultural use when the lawsuit was filed, the old owner may redeem the property within two years from the date the deed was recorded. The first year includes 25 percent of the aggregate total; the second year is at 50 percent of the total.
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