What Happens If I Don't Pay Property Taxes in Texas?

If you get behind in paying your real property taxes in Texas, you might lose your home to tax foreclosure. Fortunately, you’ll find out about the foreclosure sale before it happens, and you’ll have the chance to get current on the delinquent amounts, plus interest and costs, to prevent the loss of your home. And even if you let the foreclosure go through to a sale, you’ll get some time afterward to reclaim the property by "redeeming" it.

What Is a Property Tax Lien?

People who own real property have to pay property taxes. The government uses the money that property taxes generate to pay for schools, public services, libraries, roads, and parks. Typically, the amount of property taxes that a homeowner must pay is based on the assessed value of the property.

When homeowners don’t pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt.

What Happens if You Don’t Pay Property Taxes

All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. (Learn about your options to avoid a tax sale if you can’t keep up with the property taxes.)

Tax Sale Process in Texas

In Texas, like other states, the delinquent tax amount—including interest and penalties—becomes a lien on a home. (Tex. Tax Code § 32.01). But when do overdue taxes become delinquent? Generally, subject to a couple of exceptions, if the taxes aren’t paid before February 1 of the following year for which the tax is imposed, the taxes are considered delinquent. (Tex. Tax Code § 31.02).

At any time after the property tax becomes delinquent, the taxing authority may start a foreclosure in court. (Tex. Tax Code § 33.41). If you don’t pay off the overdue amounts or have a valid defense to the foreclosure, the court will enter a judgment, and your property will be sold to a new owner at an auction. If the home doesn’t sell at the tax sale, it will be "struck-off" to the county, which means the county gets the property. The county will then try to sell it at a later date.

Notice of the Tax Sale

Under Texas law, you must be given written notice of the sale before it takes place. Typically, you’ll get the notice by personal delivery or in the mail. The notice will include the date, time, and location of the sale. (Tex. Tax Code § 34.01).

The notice is also published in a newspaper or, if there is no newspaper in your county, posted publicly. (Tex. Tax Code § 34.01).

How to Stop a Property Tax Sale

To stop the foreclosure, you can cure the delinquency by paying off the amount of the judgment at any time before the sale. Curing the delinquency will release the tax lien and halt the foreclosure process. (Tex. Tax Code § 33.53).

How a Property Tax Sale Works

If you don't cure the delinquency, your home will be sold at a public auction to the highest bidder. The minimum bid must be:

• the total amount of the judgment, which includes the owed taxes, interest, penalties, and costs, or
• the market value of the home, whichever is less. (Tex. Tax Code § 34.01).

The winning bidder (or the county, if no one buys the home at the sale), then gets a deed (title) to your home, subject to the right of redemption.

How to Redeem the Property After a Tax Sale

In Texas, in most cases, you can redeem the home (get it back) at any time up to two years after the date the deed is filed in the county records. (Tex. Tax Code § 34.21).

To redeem, you’ll generally have to reimburse the high bidder for the purchase price paid at the tax sale, plus:

• the amount of the deed recording fee
• the amount the purchaser paid for taxes, penalties, interest, and costs on the property, and
• a redemption premium of 25% of the aggregate total if you redeem during the first year of the redemption period or 50% of the aggregate total if you redeem during the second year of the redemption period. (Learn more in Getting Your Home Back After a Property Tax Sale in Texas.)

Getting Help

If you’re facing a property tax foreclosure in Texas, consider talking to a foreclosure lawyer or a real estate lawyer to learn about your different options and rights.