No one likes paying taxes. And property taxes in Texas place a significant burden on homeowners statewide. But not paying your taxes can lead to unwanted penalties, including foreclosure and the loss of your home.
If your property taxes are more than you can pay, you have options. Texas has programs that include deferrals and paying in installments over time. However, don’t forget that you can file a property tax protest and lower the taxes you owe.
Because Texas does not collect a state personal income tax, property taxes account for a large portion of local budgets for services. Every Texas county has a property tax appraisal district responsible for valuing all taxable land.
Your local appraisal district will use mass-appraisal techniques to estimate the current market value of your home. This assessment determines the amount of property taxes you pay. Your assessment value is multiplied by the tax rate each taxing district in your area charges to calculate your annual tax liability. Taxing districts include bodies such as school districts, cities, and counties.
Your property taxes must be paid before February 1 of the year following the year in which imposed, or they will be deemed delinquent.
If you fail to pay your property tax bills and fall into delinquency, the amount you owe will quickly grow. This is because Texas law allows taxing districts to collect penalties and interest on unpaid tax bills. Additionally, the taxing unit can enforce a debt owed by holding you personally liable or foreclosing on your home.
As soon as your taxes become delinquent after February 1, the taxing unit will begin adding penalties and interest to the amount you owe. For the first five months, there is a six percent penalty on the delinquent amount, plus one percent for each month following February. However, after July 1, the penalty will equal twelve percent of the amount owed regardless of the length of the delinquency.
Taxing districts also can collect interest on unpaid property taxes. Texas law allows one percent interest to accrue for each month or portion of a month the tax remains unpaid. Unlike penalties, interest will continue to add to the amount you owe every month as long as the bill remains unpaid.
Individual homeowners can be held personally liable for delinquent property tax bills, plus penalties and interest. And selling the property does not allow a homeowner to avoid paying the bills.
In addition to personal liability, a taxing district can initiate foreclosure on your home due to a property tax delinquency. A tax lien automatically attaches to real estate on January 1 of each year to secure the payment of property taxes. This lien allows the government taxing unit to file a foreclosure lawsuit when property taxes become delinquent.
Notably, even if you lose your house through foreclosure, you may still be personally liable for any tax debt the sale or transfer to the taxing unit did not cover.
Because it can be so costly not to pay your property taxes, you may want to consider taking action if you are struggling with covering your annual liability.
All homeowners can explore whether there is an alternative payment option that fits their needs. For example, if you are over 65 years old, you can seek to defer tax payments on your primary residence or pay in four interest-free installments. There are also provisions in Texas law that allow homeowners who live in disaster or emergency areas to spread out their payments over installments.
To make your property taxes more affordable, you may seek to lower the amount of taxes you owe by filing a property tax protest. A successful property tax protest will reduce the tax-assessed value of your home. Because each taxing district in your area uses this value, a lower assessment will equal smaller bills from each property tax unit!
Best of all, you can begin the property tax protest with experienced professionals on your side, risk-free. Sign-up online for Watchtower Protest’s services today!
Property tax in Montgomery County - a property tax consultant can help you manage your tax obligations, exemptions, deductions, and how to challenge your assessment.