Unpaid property taxes in Texas do not sit still. They grow on a schedule set by statute, and after a while the taxing units can sue and have the house sold.
The good news is that the same statutes give homeowners tools most people never hear about: an installment agreement the collector must grant on a homestead, and a deferral that stops collection entirely for owners who are 65 or older or disabled.
When the taxes actually go delinquent
Texas property taxes are due when the bill arrives and become delinquent if they are not paid before February 1 of the following year. That is Tax Code section 31.02. There is no grace period after that date.
What the penalty and interest add up to
Under Tax Code section 33.01 a delinquent tax takes a penalty of six percent for the first calendar month it is late, plus one percent for each additional month before July 1. A tax still unpaid on July 1 carries a total penalty of twelve percent regardless of the number of months.
Interest runs separately, at one percent for each month or part of a month the tax is unpaid, and it does not stop at twelve.
On top of that, when a taxing unit has turned the account over to a law firm, an additional penalty can be added to cover the cost of collection. That penalty cannot exceed the compensation in the unit contract with the attorney, and the law caps that compensation at twenty percent of the delinquent tax, penalty and interest collected. Twenty percent is a ceiling, not an automatic charge.
The installment agreement a homestead owner can ask for
If the property is your residence homestead with a section 11.13 exemption, Tax Code section 33.02 says the collector shall enter into an installment agreement when you ask, as long as you have not had one in the preceding 24 months.
The agreement has to be in writing, has to run at least twelve months, and cannot run more than thirty six. While you are keeping to it on a homestead, the section 33.01 penalty does not accrue, the property cannot be seized, and a suit cannot be filed.
This one is worth a phone call before anything else. It is a right, not a favour, and it stops the penalty clock on a homestead.
The deferral for owners 65 and older, and for disabled owners
Tax Code section 33.06 lets an individual who is 65 or older, or disabled, defer collection on their residence homestead by filing an affidavit with the chief appraiser.
The tax lien stays on the property and interest continues, but at five percent a year instead of the usual rate, and no penalty accrues during the deferral. Collection resumes after the homestead stops being owned and occupied, with a window before the taxing units can act.
It does not erase the tax. It stops the pressure, which is often what a household actually needs.
Where a tax suit leads
When the account stays unpaid, the taxing units can sue. Court papers are served on you, not mailed as a letter, and a judgment can order the property sold at a tax sale.
Sale proceeds are applied in the order the statute sets: the costs of the sale, the fees and court costs, then the taxes, penalties, interest and attorney fees. Anything left is excess proceeds, and the former owner has to petition the court to be paid, before the second anniversary of the sale.
A homestead sold at a tax sale can be redeemed within two years of the purchaser deed being recorded, by paying what the buyer paid plus costs plus a premium of twenty five percent in the first year or fifty percent in the second. Other property has 180 days and a premium capped at twenty five percent.
Selling with a balance owed
You never write the county a check to sell. The title company pays the tax balance, the penalties and any recorded lien out of the proceeds at closing, and you see all of it on the settlement statement before closing day.
If a payment plan or a deferral would serve you better than selling, your page says so.
How the clock runs
- January 31The last day to pay without penalty.
- February 1Delinquent. Six percent penalty plus one percent interest, growing each month.
- July 1Penalty reaches twelve percent, and an attorney collection penalty can be added on top.
- The suitCourt papers, not letters. A judgment can order the property sold.
- After a tax saleExcess proceeds must be claimed from the court within two years. A homestead can be redeemed for two years, at a premium.
Written from the statutes themselves: Tax Code chapter 31, chapter 33. We are not lawyers and this is not advice about your own case.