New Rules for Texas Property Tax Payment Plans
As a requirement of SB 247, property tax lenders must now include the following language on their solicitation material “Your tax office may offer delinquent tax installment plans that may be less costly to you. You can request information about the availability of these plans from the tax office.” We’ve always taken the approach that an educated customer will be our best customer. We also feel that in most cases, once a property owner understands the restrictions and limitations of a tax assessor payment plan, they will seek out a tax financing plan such as a property tax loan that offers greater flexibility and lower monthly payments. This is not the 1st time we’ve covered payment plans available from the tax assessor (see our blog on Texas Property Tax Payment Plans from June 14, 2012); however, in this article we are reviewing some of the new legislation that now requires tax assessors to offer these plans, whereas in the past many of the tax payment plans were available at the discretion of the tax assessor.
Qualifications for Texas Tax Assessor Installment Plan
With the passage of HB 1597, tax assessors are now required to offer installment payment agreements for delinquent taxes on all residential homesteads. Tax assessors are not required to offer these plans on non-homestead, investment, or commercial properties. Under these new rules, property tax payment agreements must meet the following criteria:
- Extend for a period of at least 12 months, but not longer than 36 months.
- Provide for payments to be made in equal monthly installments.
- The property owner cannot have entered into a prior installment payment agreement in the previous 24 months.
- Be in writing.
When a homeowner enters into a payment agreement interest will continue to accrue as if no installment payment agreement exists. Additional penalties, on top of the interest, will not accrue after the date of the installment payment agreement so long as the property owner meets the repayment terms of the agreement. If the homeowner misses a payment or fails to meet any provision of the agreement, penalties of up to 35% will be applied to the tax balance as if the payment plan never existed.
If the property owner fails to meet the terms of the payment plan, the tax collector must deliver a notice of delinquency prior to seizing or selling the property or filing a lawsuit to collect the delinquent tax on the property. The notice must be delivered to the person who is in breach of the agreement and any other owner of an interest in the property.
Keep in mind that additional payment plans are available for residential homestead properties whose owners have an over 65 exemption, a disability exemption, or a veterans disability exemption. If you qualify for any of these exemptions, we encourage you to contact your tax office regarding the availability of these plans.
Are Property Tax Loans a Better Option?
Tax assessor payment plans are fairly restrictive as compared to property tax loans. Generally the interest rate on a property tax loan will be lower and the payment term can be longer, up to 120 months in most cases. This will provide the property owner a more affordable payment and greater flexibility. Additionally, if you miss even one payment with the tax assessor, the penalties of up to 35% will be tacked on to the property tax balance as if the installment plan never existed. To find more about affordable property tax payment plans contact Property Tax Funding at 877-776-7391.