Why is the July Texas Property Tax Penalty So Big?
There’s no doubt about it — the property tax penalty that hits on July 1st is the biggest penalty of the year. But why? If you owe delinquent property taxes, it can certainly feel like you’re getting kicked while you’re down. The following are the key reasons why this hefty penalty gets added to your tax bill.
1. It’s Part of the Texas Tax Code
Texas law states that you’re delinquent if you don’t pay your property taxes by February 1st. Likewise, as outlined in the Texas Comptroller’s guidelines for penalty tax bills, you’ll accrue a 22% fee on July 1st if you were behind on property taxes before June and still haven’t settled your debts. Aside from paying up, or successfully securing a tax exemption or penalty waiver (which is quite tricky), there’s simply nothing you can do to prevent it.
2. It’s Used by the Taxing Authority to Pay Fees
Local taxing authorities often rely on help from an attorney, tax collector or other outside entity when securing past due taxes from residents. Additionally, these localities incur various court costs and legal expenses throughout the process. County treasurers and other officials utilize property tax penalties, particularly the 22% penalty that hits in July, to cover these fees.
What Happens After the July Property Tax Penalty?
Adding that 22% hit to your tax bill might seem like it’s as bad as it can get. However, if you’re still behind on property taxes after incurring it, your headaches aren’t over yet.
First of all, while the July property tax penalty is the highest one every year, it is not the last. Prior to July, you incurred a 2% penalty for every month you were past due (in addition to the initial 7% penalty in February). Starting in August, a 1% penalty will be added each month that you don’t pay off your debts. This is, of course, along with any legal fees that you personally have to take on due to the mounting complications with your case.
Tax Lien and Tax Foreclosure
The other things that may happen after the 22% property tax penalty involve tax lien and tax foreclosure. Technically, this can happen at any point during your delinquency, but it becomes more likely as time goes on — with July being a pretty good indicator of its increasing possibility.
- A tax lien is the government’s official legal claim to secure any property on which you haven’t paid the proper taxes, including your home.
- Tax liens can impact your credit and ability to buy houses in the future.
- Anytime after the tax lien is in place, authorities can begin the tax foreclosure process.
- Tax foreclosure allows the authorities to sell the secured property at auction.
- Settling all delinquent property tax debt before an auction will immediately lift the tax lien and stop the tax foreclosure.
How Much Can Property Tax Increase in Texas?
Many people who are behind on property taxes wonder just how much property tax can increase in Texas. The short answer is — quite a lot. Every month that you still haven’t paid means another penalty.
As mentioned, if you don’t pay by January 31st and each subsequent month of the year, property tax penalty rates go up as follows:
- February 1st: 7% penalty
- March through June: 2% penalty each month
- July 1st: 22% penalty
- August through December: 1% penalty each month
All told, if you owe delinquent property taxes by the end of the year, you’re looking at a total increase of 47.6%. For further examples and statistics, check out our Property Tax Penalty Chart.
How Can Tax Ease Help?
Tax Ease is here for anyone who is behind on property taxes in Texas. While the July penalty is undoubtedly a big burden to carry, we can help you lighten the load. We’ll show you how.
Primarily, everything Tax Ease does is to help you breathe. Every property tax penalty adds more stress to an already stressful experience, but we’ll work with you to overcome it.
Dealing with Property Tax Penalties the Tax Ease Way
Here are just a few of the ways that we’ll help:
- We’ll review your application quickly.
- Once you close, we’ll immediately pay off your full tax bill.
- We’ll create a repayment schedule that works for your life.
- With no application fees, affordable payments and free quotes, our services will fit within your budget.
- We’ll keep all operations under our roof to avoid confusion.