No one ever wants to miss a property tax deadline, but it happens. And when it does, the amount you owe can add up fast. For that reason, it’s important to understand that property taxes in Texas generally become delinquent on February 1. At this point, penalties and interest will start to accrue.
The initial penalty is 6%, plus 1% interest. The charges will increase each month. For example, if an additional collection penalty applies beginning July 1, the total charges can reach up to 48% by year's end.
If you are behind on your property taxes or are concerned you may run into challenges, it helps to know the costs and how they are calculated. In this article, the team at Property Tax Funding explains Texas property tax penalties by month, discusses exceptions, and reviews your payment options.
Who is Property Tax Funding?
Property Tax Funding has been in business since 2008. To date, we’ve helped more than 12,000 Texas property owners. We’re proud to be A+ accredited by the Better Business Bureau (BBB) and have over 400 verified 5-star reviews on Google and the BBB.
As a lender licensed by the Texas Office of Consumer Credit Commissioner, we have extensive experience helping residential and commercial property owners finance their property taxes. We require no credit check and request $0 upfront, with no payments for up to 12 months. Further, we offer terms up to 10 years with no hidden fees. Our Texas-based team is proud to assist you from application to payoff. We serve all 254 counties in Texas, and we never transfer your loan to an outside servicer.
When Do Property Taxes Become Delinquent in Texas?
With few exceptions, Texas property taxes are due on January 31st of each year under Texas Tax Code §31.02. This means unpaid taxes are considered delinquent starting February 1st each year.
However, when January 31 falls on a Saturday, Sunday, or legal holiday, the payment deadline moves to the next business day. Under the Texas Tax Code §1.06, property owners have until that next business day to pay without being considered delinquent.
What Penalties and Interest Apply to Late Texas Property Taxes?
If you pay property taxes late, you may incur more than interest. Our goal is to create awareness of the three separate charges that will apply.
Standard Late Payment Penalty
Under Texas Tax Code §33.01, property taxes are generally subject to a 6% penalty during the first month of delinquency. That penalty increases by 1% each month, reaching 10% in June. On July 1, that penalty increases to 12%, where it remains for the rest of the year.
Monthly Interest
In addition to the penalty, the taxing unit charges 1% interest during the first month your property taxes are delinquent. You will be subject to an additional 1% for each additional month or portion of a month.
This is simple interest, which means that it is calculated on the original unpaid tax amount rather than previously accumulated interest. Different from standard penalties, interest continues to accumulate for as long as the taxes remain unpaid, even beyond the first year.
Additional Attorney Collection Penalty
Starting July 1, some Texas taxing units may add an attorney collection penalty to unpaid property taxes. This applies when the taxing unit has an eligible contract with a collection attorney and meets the required notice provisions.
Under Texas Tax Code §33.07, the taxing unit must notify property owners 30 to 60 days before July 1. The additional penalty can be as high as 20% of the taxes, penalties, and interest owed, as permitted under §6.30, but the actual rate may be lower.
Texas Property Tax Penalties by Month
Now that you understand the three charges you can incur if you pay Texas property taxes late, it may help to see how those fees add up over time.
The chart below depicts how Texas property tax penalties and interest accumulate during the first year of delinquency. It also illustrates how much you could owe on an original $10,000 property tax bill, depending on when you make your payment.
These figures assume the maximum 20% attorney collection penalty applies beginning in July. Your actual charges may be less depending on your unique circumstances and local taxing jurisdiction.
Month-by-Month Texas Property Tax Penalty Table
|
Paid during
|
Penalty
|
Interest
|
Penalty + interest
|
With max collection penalty
|
On a $10,000 bill
|
|
February
|
6%
|
1%
|
7%
|
Not yet
|
$10,700
|
|
March
|
7%
|
2%
|
9%
|
Not yet
|
$10,900
|
|
April
|
8%
|
3%
|
11%
|
Not yet
|
$11,100
|
|
May
|
9%
|
4%
|
13%
|
Not yet
|
$11,300
|
|
June
|
10%
|
5%
|
15%
|
Not yet
|
$11,500
|
|
July
|
12%
|
6%
|
18%
|
41.6%
|
$14,160
|
|
August
|
12%
|
7%
|
19%
|
42.8%
|
$14,280
|
|
September
|
12%
|
8%
|
20%
|
44.0%
|
$14,400
|
|
October
|
12%
|
9%
|
21%
|
45.2%
|
$14,520
|
|
November
|
12%
|
10%
|
22%
|
46.4%
|
$14,640
|
|
December
|
12%
|
11%
|
23%
|
47.6%
|
$14,760
|
For example, suppose you originally owed $10,000 in property taxes. By December, the standard 12% penalty and 11% interest would bring your balance to $12,300. If your local taxing jurisdiction applies the maximum 20% attorney collection penalty, that would add another $2,460, bringing your total to $14,760. That's a 47.6% increase over your original tax bill.
Why Might Your Property Tax Penalties Be Lower Than the Table Shows?
As mentioned, in the figure above, we show the maximum penalties and interest that you could face under the standard schedule. However, you may not owe these amounts.
For example, the additional attorney collection penalty is not automatically 20%. The actual amount depends on your local taxing unit's collection agreements and whether the required legal procedures have been followed. You may owe only the standard penalty and interest.
Additionally, qualifying homeowners may be eligible for payment arrangements or other protections that affect their charges.
The only way to truly know your exact balance is to contact your county tax assessor-collector or the office responsible for collecting your property taxes.
Who Qualifies for Different Property Tax Payment Rules?
No two pieces of Texas property are the same, so the standard penalty schedule doesn't apply the same way to every Texas property owner. Here are some exceptions to those standard rules.
Homestead Owners With Installment Agreements
If your property qualifies as a residence homestead, you may be able to arrange an installment agreement with your county tax office to pay overdue property taxes over time. Under Texas Tax Code §33.02, additional monthly penalties generally stop accumulating as long as you remain current on your agreement. However, interest continues to accrue on the unpaid balance.
Keep in mind that missing a required payment can reinstate the original penalties, as though you had never agreed in the first place.
Seniors and Disabled Property Owners
Texas offers special payment arrangements for qualifying homeowners who are 65 or older, have a disability, or are certain disabled veterans. Under Texas Tax Code §31.031, eligible property owners may divide their property taxes into four installments instead of paying the full balance at once.
To qualify for this arrangement without standard delinquency penalties, homeowners must make their first installment before the delinquency date and follow the required payment schedule. However, missing an installment deadline can result in a separate 6% penalty, along with interest on the overdue installment.
Property Owners Using Tax Deferral
Some Texas homeowners may qualify to postpone paying their property taxes through a tax deferral. This option is available to qualifying homeowners age 65 or older, individuals with disabilities, and certain disabled veterans.
Under Texas Tax Code §33.06, standard delinquency penalties do not accumulate while an eligible deferral is in effect. Instead, interest generally accrues at an annual rate of 5%.
However, a deferral does not cancel the taxes owed. It simply postpones collection, meaning the homeowner or their estate will eventually need to address the outstanding balance.
What Happens if You Fail to Pay Your Texas Property Taxes?
First, understand that paying your property taxes is a legal obligation in Texas under Texas Tax Code §32.07. Additionally, §32.01 addresses property tax liens, while Chapter 33 outlines how local tax jurisdictions may collect unpaid taxes. So, if you do not pay your property taxes, you may face the following consequences:
- Your unpaid balance will keep increasing as interest accumulates each month.
- Unpaid property taxes create a lien against your property, which can complicate selling or refinancing it.
- Your local taxing jurisdiction may file a lawsuit to collect the unpaid taxes, penalties, and interest.
- If the taxes remain unpaid, legal proceedings could eventually result in the sale of your property to satisfy the debt.
What Are Your Options for Paying Delinquent Texas Property Taxes?
If you have unpaid property taxes in Texas, ignoring the situation is not the best option. The longer you wait to get caught up, the more interest and penalties you will incur. Plus, you put yourself at greater risk for legal action.
Here are your options if you are delinquent.
- Pay the outstanding balance to stop penalty and interest charges from accruing further. Get the current payoff amount from your local tax office before paying.
- Talk to your local tax office about paying overdue taxes through an installment plan. Specific eligibility and terms will vary.
- Apply for a property tax deferral, which allows you to postpone paying all or part of your Texas property taxes until a later date. Understand that a deferral does not mean forgiveness, and you will still be responsible for paying your taxes and incurred fees.
- Consider a property tax loan, in which your lender pays the delinquent taxes on your behalf. However, please note that this is also not property tax forgiveness. The difference is that you will now pay your lender according to your financing agreement, rather than your local tax office.
Get Help With Your Delinquent Texas Property Taxes
Ignoring the deadline for paying your Texas property taxes is never the best path forward. If you believe you will miss the deadline due to lack of funding or another situation, contact your local tax office to discuss options before the deadline approaches. You may also wish to consider a property tax loan.
At Property Tax Funding, we provide loans to residential and commercial property owners in Texas to help them avoid significant penalties, interest, and legal fees. We offer 24-hour approval and no payments for up to 12 months, which can help you get caught up before the next tax year and deadline arrives.
Get your free estimate today or contact us at 877-776-7391 with any questions.
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