Selling a Texas House When You Owe Back Property Taxes

Falling behind on Texas property taxes starts a process with fixed steps: the balance grows on a set schedule, a lien backs it, and a standard sale pays it off at closing. If taxes are one of several debts, read selling a house to pay off debt in Texas. For an inherited house, see taxes on inherited property in Texas.

When a Texas tax bill turns delinquent

Under Tax Code Sec. 31.02, taxes are due when you receive the bill and become delinquent if not paid before February 1 of the next year. The Tarrant County Tax Office lists January 31 as the last day to pay without penalty.

Sec. 32.01 attaches a tax lien every January 1 for that year's taxes, penalties and interest. Sec. 32.05 ranks it ahead of a homestead interest and, with narrow exceptions, other creditors and lienholders, including an HOA.

How penalty and interest build

Sec. 33.01 adds a penalty and interest, and both keep running while the tax is unpaid, even after a judgment.

Tax Code Sec. 33.01

Charge	What the statute says
Penalty, first calendar month delinquent	6% of the tax
Each additional month or portion of a month unpaid before July 1	1% more
Tax still delinquent on July 1	12% total penalty, however many months have passed
Interest	1% for each month or portion of a month unpaid

If a taxing unit has hired a collection attorney under Sec. 6.30, Sec. 33.07 lets it add a collection penalty to taxes that went delinquent from February 1 through May 1 and are still unpaid on July 1, after notice delivered 30 to 60 days before July 1. The penalty cannot exceed the attorney's contract pay, which Sec. 6.30 caps at 20% of the tax, penalty and interest collected. Sec. 33.08 allows a similar penalty on certain taxes that go delinquent on or after June 1, starting the first month that begins at least 21 days after notice.

Ways to catch up without selling

• Installment agreement (Sec. 33.02). On a homestead with a Sec. 11.13 exemption, the collector must agree to a written monthly plan of 12 to 36 months when you ask, unless you had one with that collector in the past 24 months. The 33.01 penalty pauses while you pay; interest does not. Signing irrevocably admits the debt, and a missed payment brings the penalty back.
• Quarter payments (Sec. 31.031). Owners 65 or older or disabled with a Sec. 11.13(c) homestead exemption, and certain disabled veterans, can pay the current bill in four equal parts without penalty or interest if the first is paid on time with notice.
• Deferral or abatement (Sec. 33.06). An owner who is 65 or older, disabled, or a qualifying disabled veteran can file an affidavit with the appraisal district to defer collection on the home they own and live in. A similar affidavit can pause a pending suit or tax sale. The lien stays and interest runs at 5% a year, with no 33.01 penalty. Once you no longer own and live there, a suit or sale can follow from the 181st day after the collector delivers a new delinquency notice.

Dallas County's tax office lists help topics on delinquency, deferrals and payment arrangements, and its payment page applies partial payments pro rata to tax, penalty, interest and collection penalty.

Tax suits and tax sales

Under Sec. 33.41, a taxing unit may sue any time after a tax goes delinquent, to foreclose its lien, to make the owner personally liable, or both. Sec. 33.48 adds the suit's costs to the debt. After a judgment, the property can be sold at a tax sale under Chapter 34. The Tarrant County tax office says properties with unpaid tax accounts may be sold at public auction.

Redemption after a tax sale

Sec. 34.21 lets a former owner buy the property back. If it was a residence homestead or land designated for agricultural use when the suit was filed, the owner has until the second anniversary of the recording of the buyer's deed and repays the bid, recording fee, and taxes, penalties, interest and costs the buyer paid, plus 25% of that total in the first year or 50% in the second. For other property, the limit is the 180th day after the deed is recorded, with a premium of no more than 25%. Other amounts apply if a taxing unit took it.

How back taxes get paid when you sell

Under Sec. 31.08, anyone can ask a collector for a tax certificate showing the delinquent taxes, penalties, interest and known suit costs owed to each taxing unit, for a fee of no more than $10. The title company handling a sale typically requests one. Under the standard resale contract, TREC No. 20-19, the seller furnishes tax statements or certificates showing no delinquent taxes at closing (Paragraph 9.B(1)), and liens left at closing are paid from the sale proceeds, except a loan the buyer assumes (Paragraph 9.B(4)).

Plainly: "we pay all closing costs" never covers your taxes, penalties, interest, liens, loan payoffs or HOA dues. Those come from your proceeds. If you owe more than the house will bring, have a Texas real estate attorney review the numbers.

Selling, listing or keeping the house

To stay, ask the tax office about a plan or deferral first. If the mortgage is behind too, see stopping foreclosure by selling.

If the house is in good condition and you have time, listing with an agent often nets more, because more buyers compete for it. It takes showings and a longer wait. A cash sale tends to fit when several years of taxes have stacked up, a suit leaves little time, the house needs repairs you cannot fund, or it was inherited and no one will live there.

Selling to Cash Home Advisors

You can sell as-is, without making repairs, and we can close in 7–14 days. We pay all closing costs. Your back taxes and liens are paid from your proceeds, not on top of them. Se habla español. Read how it works, or request an offer.

If a bankruptcy case is open, the tax lien is handled inside that case. See selling during bankruptcy. The state index is the Texas hub.