Selling a House with Back Property Taxes in Texas

Texas has no state income tax, so local governments rely heavily on property taxes. For many homeowners, the yearly bill is now one of their biggest expenses. Fall behind, and the amount owed can grow quickly.

If you are behind on property taxes, here is how it works and what your options are, including selling.

When Texas property taxes become delinquent

Property tax bills usually go out in the fall and are generally due by January 31. If the bill is not paid by then, it becomes delinquent on February 1.

From there, costs add up:

• Penalties and interest begin on February 1 and increase every month the bill stays unpaid.
• Starting July 1, many taxing units add a collection fee of up to 20% to cover the cost of their collection attorneys.
• After that, the taxing units can file a lawsuit to collect the taxes by foreclosing on the property.

The exact amounts depend on your county and the taxing units involved. Your county tax office can give you a precise payoff.

What a tax foreclosure looks like

Unlike most mortgage foreclosures, a tax foreclosure in Texas goes through the courts. If the court rules for the taxing units, the property can be sold at a tax sale, usually conducted by the sheriff or a constable.

After a tax sale, the owner of a residence homestead or agricultural land generally has two years to redeem the property. For other property the window is much shorter. Redeeming costs more than the original taxes, because you must repay the buyer plus a premium.

Options before selling

Before you decide to sell, look at these:

• Payment plans. Many tax offices offer installment agreements.
• Deferral for seniors and disabled owners. If you are 65 or older, or disabled, and the property is your homestead, Texas lets you defer collection of taxes while you live there. Interest still adds up, but the home cannot be sold for those taxes while the deferral is in place.
• Exemptions. Make sure you have every exemption you qualify for, such as the homestead exemption. Check with your appraisal district.

If one of these works for you, it may let you keep the property.

How selling with back taxes works

If keeping the property is not realistic, selling can stop the penalties and protect your equity. And you do not need to pay the taxes first.

1. You agree on a price with the buyer.
2. The title company gets payoff figures from the county tax office.
3. At closing, the taxes, plus any mortgage, are paid from the sale.
4. Whatever is left goes to you.

This works for houses, land and lots, rentals and commercial property.

Local tax offices

Taxes in the counties we serve are collected by:

• Dallas County Tax Office, see our Dallas back taxes page
• Rockwall County Tax Assessor-Collector, see our Rockwall page
• Hunt County Tax Assessor-Collector, see our Greenville page
• Hopkins County Tax Assessor-Collector, see our Sulphur Springs page

Do not wait

Every month adds more penalties and interest, and once a lawsuit is filed, legal costs grow too. If you are behind and cannot catch up, learn more about selling a house with back taxes, or request a free offer to see what you would walk away with.