How to Avoid the 22% Property Tax Penalty without Going Bankrupt

//How to Avoid the 22% Property Tax Penalty without Going Bankrupt

How to Avoid the 22% Property Tax Penalty without Going Bankrupt

Commercial and personal property owners must pay their property tax by the due date. In Texas, property taxes are due on January 31st each year. It’s important you observe this deadline to avoid costly property tax penalties. If you miss it, and continue to owe uncollected taxes to the tax collector, the already-high penalty tax rate goes up. Mostly, the biggest property tax penalty of the year hits July 1st. While that might seem daunting if you’re behind on payments, you can avoid the penalty for late property tax payment — and keep from going bankrupt — by working with Tax Ease.

The penalty for delinquent taxes that haven’t been paid by July 1st is 22% of the amount owed. That’s huge, but you can avoid it by taking proactive measures. Certain factors, like the COVID-19 pandemic, have made it hard to meet tax obligations on time. You can apply for a penalty waiver, but only once the deadline has expired. Read on to learn more about paying delinquent taxes on property so you can avoid rising property tax penalties.

When Are Property Taxes Considered Delinquent?

Tax Ease offers multiple services to ensure that you don’t break the law — or break the bank. We seek to give you a better understanding of delinquent property taxes, meaning you should avoid going bankrupt if you pay the tax fine on time.

As of February 1st, the state of Texas considers your property tax late. Therefore, a property tax late fee immediately sets in from this date, and authorities label your taxes delinquent. At this point, you begin attracting a bevy of tax penalties and interests.

At times, the combination of penalties and interest for late property tax could be as high as 47.7%. The exact amount that you end up paying depends on several factors, including where you live.

Administrative fees also come into play where delinquent property taxes are concerned. If you fail to take decisive action and measures, such as what Tax Ease offers, you might go bankrupt or embark on a journey that leads to foreclosure.

Usually, foreclosure sets in when a tax lien arises. A tax lien gives the local authority the first rights to your real estate over other creditors. Here, a lien amount applies. In this case, the lien amount is a total of the following:

  • Overdue amount
  • Interests
  • Penalties

Dealing with Property Tax Delinquency

You have every reason to feel worried once property tax delinquency gets into your life. Fortunately, you can overcome all that fear once you know what to do. In this case, get in touch with Tax Ease for all the help that you need.

Factors that create the environment for delinquency to set in include:

  • COVID
  • Car and home repairs
  • Costs of running your business
  • Family and personal emergencies

In all these cases, you need huge sums of money to settle your finances. This often leaves you with little to no funds to pay your property tax bill. Before you know it, you might find yourself a candidate for a property tax penalty.

What Happens If You Pay Property Taxes Late?

Be ready for the following:

  • Accruing interests and property tax penalties in addition to the amount that you already owe
  • Authorities placing a tax lien on your property
  • Starting the process of foreclosure

A penalty of 7% sets in the moment you are delinquent. This fee is applicable for all those paying property taxes late. Failure to pay this amount attracts a further 2% on the first day of each new month as a property tax late fee.

What Options Do You Have When You’re Delinquent?

In this case, you could:

  • Pay the tax bill in full, and this includes each fee and penalty for paying property taxes late
  • File a delinquency appeal
  • Work to remove the tax lien from your property
  • Apply for a property tax loan

Obtaining Property Tax Loans

Property tax loans are available to you too, and it would be prudent to take advantage of them to reduce your financial burden. You can apply for such a loan, which Tax Ease offers, by following this simple process:

  • Fill out an application form or call any Tax Ease office
  • Give the Tax Ease team time to gather specific information on your property while also verifying your income
  • Let the Tax Ease team create a payment plan based on your budget and income
  • Arrange a time and place for closing your loan

Finally, Tax Ease will pay your property taxes and any applicable property tax late fee in full!

Considering Additional Property Tax Relief

Tax Ease also advises you whether or not you should apply for property tax relief. The relief is part of the program that authorities extend to property owners who meet specific criteria. It helps to reduce the tax burden for such owners. Such a program includes:

  • Residential property tax relief
  • Commercial property tax relief

If you prefer this option, you should also consider asking authorities to waive the late property tax. You can apply for relief if your property was unfairly valued or the assessor erred.

What Happens if You Don’t Pay Property Taxes?

Texas depends on property taxes to keep public services running smoothly. The state is one of the few that don’t charge personal income taxes. Funds raised through such taxes, including property tax penalties, ensure that local government services are available to all.

As stated earlier, authorities have the option of placing a tax lien on your property in case you don’t pay your property taxes and the accruing fines, interests and property tax penalties at all. Other than this, the process of foreclosing your property can also set in at any time.

So what happens if you don’t pay property taxes at any point and are already late on property taxes? Authorities could sell your home at a tax sale or assume ownership of the property until they find a buyer.

Therefore, it’s in your best interest to pay the property taxes on time or as soon as possible. Otherwise, the fines and property tax penalties could get out of hand super-fast. Additionally, you might lose your property. Get in touch with Tax Ease for all the help and solutions that you need today!

taxease logo

Avoid Property Tax Penalties with Tax Ease

Even if you already took the 22% property tax penalty hit on July 1st, Tax Ease can help. We’ll set you up with a loan to pay off all property tax penalties and fees so you can get on with your life. Reach out today!

Apply Now

2021-09-20T02:22:49+00:00