What Is Tax Delinquency?
Tax delinquency occurs from failure to pay property taxes in full by their due date. For most Texas taxpayers, property taxes are delinquent beginning February 1 if they haven’t been paid.
Interest charges and penalties begin to accrue on the first day of delinquency, so you should do what you can to avoid being late on property taxes. However, if you owe delinquent property taxes, it’s not too late to get help.
Your Property Tax Payment Options Are Specific to Your County
Before we take a closer look at property tax payment options, it is essential to understand that property taxes in Texas are assessed and collected at the county level, usually by two separate entities, the appraisal district and the tax assessor-collector’s office.
The appraisal district determines personal property values and exemptions and handles protests and appeals, while the county’s tax assessor-collector’s office is where you will find information related to paying your property taxes, including the property tax payment options available in your county.
In some counties, the tax assessor-collector does not collect property taxes, in which case you should contact your local tax collection office for property tax payment options. In some counties, the tax assessor-collector does not collect property taxes, in which case you should contact your local tax collection office for property tax payment options.
The Texas Property Tax Code
The Texas Property Tax Code regulates property tax assessment, exemptions, collections, penalties and appeals for all of Texas’ 254 counties. Its statutes outline requirements and allowances – an important distinction.
If a property tax payment option is allowed in the Tax Code, it does not necessarily mean it will be available in your county. You must contact your local tax collection office for local payment options.
Property Tax Deferrals
A property tax deferral postpones but does not cancel property tax payments. Options are dependent upon the taxpayer’s situation, but in each case, the property must be a residence homestead, and the property owner must file a tax deferral affidavit with the county appraisal district.
Deferring the Full Taxable Value
The following taxpayers can defer the total taxable value of their residence homestead for as long as they own and live in the home.
- Persons age 65 or older
- Disabled persons
- Disabled veterans and surviving spouses and children of deceased disabled veterans
A tax deferral affidavit protects homeowners from losing their residence due to outstanding property taxes and will stop a pending foreclosure sale. A deferral won’t cancel penalties from back property taxes, but there are no new penalties during deferment. However, there is a 5% yearly interest charge.
Deferring Tax on Appreciating Homesteads
Any taxpayer with an appreciating homestead is eligible for this property tax payment option. It defers payments for the value exceeding 105 percent of the homestead’s appraised value, plus any new improvements in the form of additions made to the property that increase its appraised value from the preceding tax year.
As an example, let’s say in the preceding tax year, the appraised value of your residence homestead was $250,000, and this year the appraised value increased to $295,000, which includes $20,000 for the appraised value of additional living space you added to your home. You may defer paying the tax on $12,500.
$250,000 X 105% = $262,500
$262,500 + $20,000 = $282,500
$295,000 – $282,500 = $12,500
Installment Agreements For Back Property Taxes: Delinquent Taxes, Penalties & Interest
The Texas Property Tax Code requires tax collectors to offer back taxes payment options to delinquent taxpayers. While the installment agreements are rigid, entering one protects your property from sale or seizure and stops the accruing penalties.
You should be confident you can make the installments, or you will be receiving a delinquent tax notice as if you had never had an agreement with the tax collector. If you miss a payment or otherwise fail to meet the terms, a collection suit is filed, the full penalties are reinstated, and you cannot enter into another installment agreement for two years.
Escrow accounts are secured with a contract between a tax collector and a property owner. This property tax payment option requires monthly deposits that amount to the taxpayer’s estimated tax bill as determined by the tax collector.
Any property owner can request an escrow account, but the Texas Property Tax Code only requires an escrow agreement when requested by a disabled veteran, a recipient of one of the US military’s highest medals or a property owner paying taxes on their manufactured home.
Any property owner can split their tax payment into two payments if their county offers this option to its taxpayers. The first half is due by November 30, and the second half is due by June 30, which gives taxpayers more time before their property taxes become delinquent.
Property Tax Loans
While the Texas Property Tax Code allows tax deferrals, back tax payment options and other property tax payment options, you may not be eligible or able to make the required payments.
A property tax loan from Tax Ease offers the most flexible option for paying delinquent real estate taxes. A Tax Ease loan will pay your property taxes and penalties in full. You can end the worry of having a tax lien on your house, or property that can lead to foreclosure, with a solution customized to you. After a quick and easy approval process, we work with your budget to offer a low-interest payment plan you can afford.