Most counties across Texas have issued tax statements for 2010 property taxes. Current year property taxes not paid by January 31, 2011 are subject to a 7% penalty, with increasing penalties every month. However, under certain circumstances, Texas property owners can structure a property tax loan now and avoid this 7% penalty. Property owners can have their 2010 property taxes paid now if:
We’ve seen aggressive collection tactics by tax assessors and the attorneys they employ, but nothing quite like Sylvia Romo in Bexar County. With a cavalier attitude toward delinquent property tax owners, Romo’s message is clear, “Pay your taxes and don’t ignore us”. (see the complete article below) If you owe delinquent property taxes, be prepared to face not only stiff penalties and interest charges, but also the possibility of asset seizure and even foreclosure.
So how do you stay out of Ms. Romo’s sights? Obviously, pay your property taxes on time. However, in this difficult economy many Texas property owners do not have the funds available to meet their tax obligation.
In most Texas counties, 2010 property tax bills have now been issued. If you’ve not already received your tax bill, you’ll likely see it sometime in October. The first date of delinquency is February 1st, so if you do not have your tax bill by January 1st, you should contact your tax assessor to determine the amount owed.
Yes, your mortgage company can pay your delinquent property taxes without your authorization. Lenders expect borrowers who do not have escrow account to pay their property taxes when due. When property taxes become delinquent, the lender’s security interest in the property may be at risk, and the lender may step in and pay these delinquent amounts to protect their lien priority. Once paid, the lender may then establish an escrow account to be repaid and to accumulate funds for future payment of property taxes. In some cases, this can more than double an individual’s mortgage payment.
Many Texas residents contact us considering a property tax loan to help with delinquent property taxes and have no idea they may qualify for a deferral program by the state of Texas. As standard practice, we always advise our clients of their rights to a deferral and have decided to write this blog as a guide.
With July 1st only a few weeks away, it's now more important than ever to take care of your delinquent property tax bill. Delaying further will just end up costing you more to settle your tax bill.
1. Your tax bill will increase substantially on July 1st. Section 33.07 of the Texas Property Tax Code allows for the application of an additional penalty of up to 20% for delinquent real property taxes not paid prior to July 1st of the year in which they are due.
2. After July 1st, the attorney for the tax collector can file a suit against the delinquent property owner. Failure to respond to this suit may result in a judgment against the property owner for all past due property taxes along with court costs as a result of the tax suit and judgment - all adding increased expenses to the property owner.
3. Your mortgage company, without approval, can set up an escrow account and pay your taxes. Once they've paid your taxes they can demand immediate payment of the escrow shortage. Failure to pay the escrow shortage amount can result in acceleration of your note and foreclosure by the mortgage company.
We are often asked why Texas property taxes are so high. The answer is simple; Texas doesn't have a state income tax. Although Texas ranked 43rd in overall tax burden (property, sales, and income tax) during 2008, the absence of a state income tax means the responsibility of paying for schools, roads, infrastructure, and social services falls primarily upon the property owner, both commercial and residential. Don't take this the wrong way, we are not advocating a state income tax, rather it is important to understand the landscape of state and local tax revenue sources and their impact to Texas property tax rates.
The payment of property taxes is an important responsibility for each property owner. The services provided by our cities and counties along with the schools that educate our children are funded primarily by property tax revenues. Whether you live in Harris, Dallas, Tarrant, Bexar, Travis, or any other county in Texas, the process for paying property taxes is very similar.
If you are a property owner in Texas with past due property taxes, you've likely seen your mailbox stuffed with property tax loan offers. While I'm sure many of these mailings have been tossed aside, now may be the time to seek property tax help from a tax lender (see my blog about selecting a trusted lender).
Each year thousands of property owners find themselves unable to pay their property taxes due to short-term financial problems such as illness, job loss, divorce, or death of a family member. In Texas, property owners are able to obtain more reasonable repayment terms for their unpaid property taxes with a property tax loan. While a property tax loan may not be the right solution for everyone, they do offer many advantages to the property owner.
