If you don't pay your Texas property taxes by January 31, they generally become delinquent on February 1. Penalties and interest begin accumulating, and you may eventually face a collection lawsuit, a court judgment, and possibly a sale of the property.
However, property owners have options at every stage of the process. In many cases, you may even have the right to reclaim your property after a tax sale. Understanding your options can help you decide what to do next.
Who Is Property Tax Funding?
Property Tax Funding has been operating since 2008, and we've helped 12,000+ Texas property owners. We're licensed by the Texas Office of Consumer Credit Commissioner, and we work with residential and commercial property owners throughout all 254 Texas counties.
One Texas team, from application to payoff. Your loan is never transferred to an outside servicer.
What Happens After You Miss a Texas Property Tax Deadline?
The table below walks you through the six stages of the process. There is no set timeline for how quickly things progress. Much will depend on your local taxing unit and the courts.
|
Stage |
What Happens |
|---|---|
|
1. February 1 |
Property taxes generally become delinquent under Texas Tax Code §31.02. Penalties and interest begin accumulating on the unpaid balance. |
|
2. July 1 |
If your taxing unit contracts with a collection attorney, an additional collection penalty of up to 20% may be added under Texas Tax Code §33.07. |
|
3. Collection Lawsuit |
Under Texas Tax Code §33.41, your taxing unit can file a lawsuit at any time after your taxes become delinquent. |
|
4. Court Judgment |
If the court rules in favor of the taxing unit, it may issue a judgment allowing the property to be sold. |
|
5. Tax Sale |
The property may be sold at a public auction, typically conducted by a sheriff or constable. |
|
6. Redemption Period |
After a qualifying tax sale, you have a limited period to reclaim your property by paying the required amount. Under Texas Tax Code §34.21, the deadline depends on the property type. |
Note: When January 31 falls on a weekend or legal holiday, the payment deadline moves to the next business day under Texas Tax Code §1.06.
How Does a Property Tax Lien Affect Your Texas Property?
A property tax lien is a legal claim against your property that helps a taxing unit collect property taxes you owe. Texas Tax Code §32.01 says that this lien generally attaches to your property on January 1 of the tax year, even before the taxes become delinquent. §32.05 also says that property tax liens generally take priority over other liens, including mortgages.
An unpaid property tax lien can affect your ability to sell or refinance your property. In most cases, the lien is addressed during closing, meaning the taxes owed must be paid before the sale or refinance can close.
Mortgage lenders also have a financial interest in making sure your property taxes are paid. Even if you're current on your mortgage, unpaid property taxes could eventually lead to a tax sale. If the property is sold, the lender could lose money. This is one reason your lender may step in and pay the overdue taxes on your behalf.
What Happens If You Have a Mortgage and Don't Pay Your Property Taxes?
An escrow account is an account managed by your mortgage lender or servicer that holds a portion of your monthly mortgage payment to cover expenses such as property taxes and homeowners insurance. Once an escrow account is established, mortgage servicers typically pay property taxes from that account.
If you pay your property taxes separately and fall behind, you could also be violating the terms of your mortgage agreement. Many mortgages treat unpaid property taxes as a default, even if you're current on your monthly mortgage payments.
If you fall behind, your mortgage servicer may step in and pay the overdue taxes for you. Depending on your mortgage agreement, the servicer may also establish an escrow account, even if you didn't have one before. You'll then be responsible for repaying the amount the servicer paid.
Why Could Your Monthly Mortgage Payment Increase?
If your mortgage servicer pays your overdue property taxes, your monthly mortgage payment could increase by quite a bit.
Under 12 C.F.R. §1024.17, mortgage servicers may collect an escrow deficiency from borrowers who are current on their mortgage in as few as two monthly payments. If you're more than 30 days behind on your mortgage, repayment terms may depend on your loan agreement.
At the same time, your servicer may begin collecting monthly escrow payments for future property taxes. Because these payments are added on top of the repayment, your mortgage payment may rise considerably.
Review your mortgage documents and contact your servicer to discuss available repayment arrangements before your balance increases further.
Can You Lose Your Property for Unpaid Taxes in Texas?
Yes, you can lose your property if you don't pay your Texas property taxes. However, foreclosure doesn't happen automatically when you miss the payment deadline. The process varies by county and court, and there is no set timeline for when a property might be sold.
What Happens When a Taxing Unit Files a Lawsuit?
A taxing unit can file a lawsuit to collect unpaid property taxes, foreclose on its tax lien, or both. The property owner will receive notice and have an opportunity to respond.
If the court rules in favor of the taxing unit, it may issue a judgment and an order allowing the property to be sold. The length of this process varies and largely depends on the circumstances of the case and the court's schedule.
What Happens at a Property Tax Sale?
If a court authorizes foreclosure, the property may be sold at a public auction. Under Texas Tax Code §34.01, a sheriff or constable typically conducts these sales.
The proceeds pay the tax judgment and applicable costs, and any excess may be claimed through the court, generally within two years of the sale. The former owner is paid after any remaining lienholders and taxing units. A sale also doesn't always end your ownership for good. You may have a right to redeem the property, as explained below.
Can Texas Homestead Property Be Sold for Unpaid Taxes?
In Texas, a homestead generally refers to the property you own and use as your primary residence. Under the Texas Constitution, Article XVI, §50, homesteads receive certain protections against creditors and forced property sales.
However, unpaid property taxes are an exception to these protections. This means that even if your property is your primary residence, you can still face foreclosure if you fail to pay your property taxes.
Proposals to provide additional protections against property tax sales have been introduced during recent Texas legislative sessions. However, none of these proposals have passed.
Homeowners 65 or older, disabled homeowners, and certain disabled veterans may be able to postpone collection through a tax deferral, described under your options below.
Can You Get Your Texas Property Back After a Tax Sale?
Yes, it is possible to get your Texas property back even if it has been sold at a tax sale. This process is called redemption. Your right to redeem the property depends on meeting certain requirements within the allowed period.
How Long Do You Have to Redeem Your Property?
Under Texas Tax Code §34.21, how long you have depends on the type of property. The redemption period begins when the purchaser's deed is filed for record, which might not be the same as the actual tax sale date.
|
Property Type |
Redemption Period |
Redemption Premium |
|---|---|---|
|
Residence homestead, qualifying agricultural land, or mineral interest |
Up to 2 years |
25% during the first year and 50% during the second year |
|
All other property |
180 days |
Up to 25% |
To redeem, you must repay the amount the purchaser paid at the tax sale, plus other allowable costs and the applicable redemption premium.
The redemption premium can add a substantial amount to what you owe. If your property has already been sold, confirm your deadline and the amount required to redeem it before that period expires.
Is There a Time Limit for Collecting Unpaid Texas Property Taxes?
Texas Tax Code §33.05 sets a 20-year limit for taxing units to file lawsuits to collect delinquent real property taxes.
This doesn't mean you can simply wait 20 years for your property taxes to disappear. Your local taxing unit can pursue collection long before that time, and penalties and interest continue accumulating.
Under the law, taxes that have been delinquent for more than 20 years are generally presumed paid unless a collection lawsuit is already pending. For that reason, waiting for the deadline to pass is not a practical approach to dealing with unpaid property taxes.
What Can You Do If You Cannot Pay Your Texas Property Taxes?
Your options depend on where you are in the process: whether your taxes have just become delinquent, a lawsuit has been filed, or a tax sale is approaching.
Pay Your Outstanding Taxes in Full
Paying in full stops additional penalties and interest from accumulating. Contact your local tax office to request your current balance, including any added collection costs or legal fees.
Ask About a County Installment Agreement
Under Texas Tax Code §33.02, your tax office may agree to let you pay delinquent taxes in monthly installments over as long as 36 months. If the property is your homestead and has a homestead exemption, the tax office must offer an agreement of at least 12 months when you ask, unless you've had one in the past 24 months.
While you're current on the agreement, the taxing unit can't sue or sell the property. If the property is your homestead, the monthly penalty also stops while you're current. Interest continues. If you miss a payment, the taxing unit must send a notice of default before taking either step. Contact your local tax office to discuss eligibility and requirements, or compare the two.
Apply for a Property Tax Deferral
If you're 65 or older, have a qualifying disability, or are a qualifying disabled veteran, you may be eligible to defer taxes on your homestead under Texas Tax Code §33.06. Collection is postponed, and no delinquency penalties accrue while the deferral remains in effect. Interest continues at 5% annually, and the taxes are not forgiven.
Review Your Property Tax Exemptions
Take time to review whether you qualify for any Texas property tax exemptions. Exemptions exist for:
- Residence homesteads
- Homeowners 65 or older
- Homeowners with disabilities
Applying for an exemption, however, does not automatically cancel overdue taxes or stop collection proceedings.
Consider a Property Tax Loan
A property tax loan allows a licensed lender to pay your delinquent taxes on your behalf. If approved, you will receive a financing agreement outlining your responsibility to repay the lender the amount owed, plus interest and fees. The tax lien transfers to the lender, so review the terms carefully before borrowing. By law, homeowners 65 or older who qualify for the over-65 homestead exemption cannot take a property tax loan on that homestead under Texas Tax Code §32.06(a-3). Tax deferral is the alternative available to them.
According to the Texas Office of Consumer Credit Commissioner, fewer than 1% of outstanding property tax loans went to foreclosure in a typical year from 2020 through 2025. See the OCCC's property tax lending reports. However, foreclosure remains a possibility if borrowers fail to meet their repayment obligations.
Be sure to understand how property tax loans work before you apply.
Get Help Addressing Your Unpaid Texas Property Taxes
Unpaid property taxes don't go away on their own, but you have options.
Property Tax Funding offers property tax loans that allow you to pay your outstanding taxes and repay the loan over time. We've helped more than 12,000 Texas property owners since 2008, and our Texas-based team is here to help you understand your financing options.
Don't wait until unpaid taxes lead to legal action or a possible tax sale. Get your free estimate today or call us at 877-776-7391 to discuss your options.
Frequently Asked Questions
Can a Texas Taxing Unit Foreclose If I Miss One Property Tax Payment?
Not right away. Texas Tax Code §33.41 states that a taxing unit can file a collection lawsuit once your property taxes become delinquent. Missing one payment, however, doesn't guarantee that you will be subject to foreclosure proceedings. Your taxing unit must follow a specific legal process and get a court judgment before your property can be sold.
How Long Does It Take for Unpaid Texas Property Taxes to Lead to Foreclosure?
There is no set timeline. The process varies by county, the taxing unit's collection procedures, and the court's schedule. A taxing unit can file a lawsuit after delinquency, but a completed tax sale may take considerably longer.
Can I Stop a Texas Property Tax Foreclosure Once a Lawsuit Has Been Filed?
Yes, you may still be able to stop a Texas property tax foreclosure after a lawsuit has been filed. Paying the full outstanding balance, including applicable penalties, interest, and legal costs, may resolve the situation. Contact your tax office or the attorney handling the case to confirm the amount owed and available payment arrangements. However, not every arrangement will stop a pending sale.
Can I Still Redeem My Property After a Texas Tax Sale?
Yes. Texas Tax Code §34.21 gives qualifying owners a right to redeem: generally two years for residence homesteads, qualifying agricultural land, and mineral interests, and 180 days for other property, starting when
the purchaser's deed is recorded. You must pay the purchase amount, allowable costs, and the redemption premium before the deadline.
