If you're behind on property taxes in Texas, you still have options. You can pay the balance off, set up a payment plan with the tax office, defer the taxes if you're 65 or older or disabled, or sell the house and let the title company pay the taxes out of your proceeds. A tax foreclosure goes through a court, so it doesn't happen overnight, but penalties and interest start the day the bill goes delinquent.
This guide walks through how the back taxes add up, how a tax foreclosure works, and what each option looks like.
One quick note before we start: this is general information, not legal advice. Every situation is different, and a Texas real estate attorney or your county tax office can tell you what applies to yours.
The short answer
Property taxes in Texas come with a lien on the house that comes ahead of almost everything else, including your mortgage. Even the Texas homestead protection, which shields your home from most creditors, doesn't cover the taxes owed on it.
The good news is that a tax foreclosure isn't fast. The taxing units have to file a lawsuit, win a judgment, and then schedule a sale, which gives most homeowners months to choose a path. The bad news is that the balance keeps climbing the whole time, eating into your equity.
How Texas property taxes go delinquent
Texas property tax bills usually go out in the fall. They're due when you receive them and become delinquent if they aren't paid before February 1 of the next year. From there, here's how Texas handles the extra charges under Tax Code section 33.01:
- Penalty. A 6 percent penalty hits in the first month, then 1 percent more each month through June. On July 1 it jumps to 12 percent, and after that it stops climbing.
- Interest. On top of the penalty, interest runs at 1 percent for every month or part of a month the tax stays unpaid. Unlike the penalty, interest doesn't cap out.
- Collection penalty. Many taxing units hand delinquent accounts to a collection law firm and add another penalty of up to 20 percent of the tax, penalty, and interest for taxes still unpaid on July 1, with a notice sent ahead of time.
The Texas Comptroller publishes a penalty and interest chart each year if you want to see the exact percentages for the month you plan to pay.
How a tax foreclosure works in Texas
A mortgage foreclosure in Texas usually happens without a court, which is why it can move in weeks. Our guide to selling a house in foreclosure in Texas walks through that timeline. A property tax foreclosure is different. It runs through the courthouse, and it generally goes like this:
- Delinquency notices. The tax office or its law firm sends letters.
- A lawsuit. The taxing units, often the county, city, school district, and others together, file suit in district court to collect the taxes and foreclose the tax lien. You'll be served with papers. Don't ignore them.
- A judgment. If the taxes still aren't paid, the court enters a judgment for the amount owed and orders the property sold.
- The sale. A sheriff or constable sells the house at a public tax sale, after posted notice. The notice tells you the date.
There's no set number of months for all of this. Each step is a chance to fix things, and each step adds more costs to the balance.
What happens after a tax sale
Texas gives homeowners one more window after the sale, called the right of redemption. Under Tax Code section 34.21, if the house was your residence homestead, you can generally buy it back within two years after the buyer's deed is recorded. To do that, you pay back what the buyer paid plus certain costs, along with a premium of 25 percent in the first year or 50 percent in the second year. For property that wasn't your homestead, like a rental, the window is much shorter, generally 180 days.
Redemption is real, but it's expensive. It's a safety net, not a plan. And if the sale brings in more than the taxes and costs, the extra money doesn't come back to you automatically. You generally have to file a claim for it with the court, and there are deadlines.
Your options before it gets to a sale
Pay it off
If you can cover the balance, or family can help, paying it off stops the penalties and interest right away. Ask the tax office for a current payoff that includes every taxing unit.
Set up a payment plan
If the house is your homestead and has a homestead exemption, the tax collector will set up an installment agreement when you ask for one. Under Tax Code section 33.02, the plan generally runs from 12 to 36 months with monthly payments, and if you keep up with the plan, the penalty doesn't keep growing on the unpaid balance. There are limits. You generally can't get a new one if you've had one with that taxing unit in the past 24 months, and if you miss a payment, the penalty comes back as if the plan had never existed. Call before a lawsuit is filed, while you've got the most room to work.
Defer the taxes if you're 65 or older or disabled
If you're 65 or older, or disabled, and the house is your homestead, Texas lets you file a tax deferral affidavit with your appraisal district under Tax Code section 33.06. It pauses collection and can stop a pending tax suit or sale for as long as you live there and qualify. The taxes don't go away, though. Interest keeps building at a lower rate, and the whole balance comes due once the home is sold or stops being your homestead.
Talk to your mortgage company
Your lender cares about those back taxes, because the tax lien comes ahead of their loan. Most loans let the lender pay the taxes and add the cost back to you, often through a new or bigger escrow account. Your payment may jump, and missing it can turn a tax problem into a mortgage default.
Be careful with property tax loans
Texas allows licensed property tax lenders, regulated by the Texas Office of Consumer Credit Commissioner, to pay your taxes and take over the tax lien while you pay them back. Read the costs closely and compare them to the tax office's own payment plan before you sign.
Sell the house
When keeping the house isn't realistic, selling protects the equity you've built. The back taxes get paid at closing, and whatever's left after your mortgage and other payoffs goes to you.
How a cash sale handles back taxes
In any Texas sale, the title company orders a tax certificate showing exactly what's owed to every taxing unit. At closing, it pays those taxes off out of the sale proceeds, right alongside your mortgage and any other liens. You don't need to bring the taxes current first. Our walkthrough of how a cash home sale works in Texas, step by step shows where that payoff happens.
Tell us about the house, and within 24 hours you get a fair cash offer with the numbers explained line by line, including the tax payoff. Because we pay cash, there's no lender and no appraisal on our side. We buy as-is, so you don't need to sink money you don't have into repairs. When the title is clean, we can close in as little as 10 days. If a tax suit's already been filed, the title company gets the exact payoff, including court costs, so the suit is resolved when the taxes are paid.
Two honest cautions from doing this work across Dallas, Fort Worth, and the rest of DFW:
- A signed contract doesn't stop a scheduled tax sale. The taxes have to actually be paid, so the closing needs to happen before the sale date.
- Be wary of anyone who offers to "take care of the taxes" if you sign the deed over before you're paid. In a legitimate sale, money and title change hands together at a title company. Confirm in writing who the buyer is and which title company is closing.
Quick answers
When do Texas property taxes become delinquent? Taxes that aren't paid before February 1 of the year after they're billed are delinquent. Penalties and interest start that day.
How much do penalties and interest add up to? The penalty starts at 6 percent and reaches 12 percent by July 1, and interest adds 1 percent per month with no cap. Many taxing units add a collection penalty of up to 20 percent for taxes still unpaid on July 1.
Can Texas take my homestead for unpaid property taxes? Yes. The homestead protection doesn't cover the taxes owed on the home itself, so a taxing unit can sue and foreclose its tax lien through the courts.
Can I get a payment plan on back property taxes in Texas? Generally yes, if the house is your homestead with a homestead exemption. Tax collectors offer installment agreements of 12 to 36 months, with some limits, including if you've had one in the past 24 months.
Can I sell my house if I'm behind on property taxes? Yes. The title company pays the back taxes, penalties, and interest out of your sale proceeds at closing, along with your mortgage and any other liens.
The bottom line
Falling behind on property taxes in Texas is serious, but it's rarely sudden. You've usually got time to pay, set up a plan, defer, or sell, as long as you start before the costs pile up and the court dates arrive. If keeping the house no longer makes sense and you'd like to see what it would net after the tax payoff, reach out through the form on our home page, and a real local person will call you within 24 hours.
This article is general information about delinquent property taxes in Texas, not legal advice. For guidance on your specific tax account, lawsuit, or redemption rights, talk to a Texas real estate attorney or your county tax office.