Texas has no state income tax, which is part of what makes it attractive to homeowners and businesses. But the trade-off is some of the highest property tax rates in the country. For homeowners on fixed incomes, going through hard times, or dealing with estates and inherited properties, property taxes can fall behind — fast.
If you're behind on property taxes in Texas, you need to understand exactly how the system works, what the timeline looks like, and what your options are before you lose equity you can't recover.
How Texas Property Tax Delinquency Works
Texas property taxes are due January 31st each year for the previous year's assessment. After that:
- February 1: Taxes become delinquent. A 6% penalty plus 1% interest per month begins accruing.
- July 1: An additional 15–20% collection fee is added if the account is referred to a delinquent tax attorney (which most counties do automatically).
- After July 1: Total penalties and interest can exceed 40–47% of the original tax bill in the first year alone.
- Ongoing: Interest continues to accrue at 1% per month. A $5,000 tax bill becomes $8,000 or more within a year or two.
The Tax Sale Timeline in Texas
Texas counties can foreclose on a property for delinquent taxes, but the process takes time and has specific steps:
Step 1: Lawsuit Filed
After taxes have been delinquent for a period of time (typically 1–3 years, varies by county and circumstances), the taxing authority files a delinquent tax lawsuit. You'll receive legal notice.
Step 2: Judgment
If you don't respond or the taxes remain unpaid, the court issues a judgment against the property. The judgment includes the original taxes, all penalties, interest, attorney fees, and court costs. This can easily double or triple the original tax amount.
Step 3: Tax Sale
The county constable or sheriff conducts a public auction — typically held on the first Tuesday of the month at the courthouse. Your property is sold to the highest bidder, often for just the amount owed in taxes. If your home is worth $200,000 and you owe $15,000 in taxes, it could sell for $15,001 — and you lose $185,000 in equity.
Step 4: Right of Redemption
Texas law gives homestead and agricultural property owners a 2-year right of redemption after a tax sale (6 months for non-homestead). During this period, you can reclaim your property by paying the buyer the amount they paid at the tax sale, plus 25% in the first year or 50% in the second year, plus any taxes they paid. This is expensive, but it's a safety net many people don't know exists.
Exemptions and Relief Programs You May Not Know About
Before you panic, check whether you qualify for any of these Texas programs:
Over-65 Homestead Exemption
Homeowners 65 or older (on January 1) who have a homestead exemption can defer property taxes entirely — or freeze the school district portion. The deferred taxes accrue interest (currently 5%), but you can't be forced from your home for delinquent taxes while you're alive and living there.
Disability Exemption
Homeowners with a qualifying disability can also defer taxes under the same program as the over-65 exemption.
Installment Payment Plans
Texas law allows delinquent taxpayers to pay in installments in some circumstances. For homestead properties, you can sometimes enter a payment plan directly with the taxing authority — typically requiring a down payment and monthly payments over 12–36 months. Contact your county tax office directly; not all counties advertise this well.
Homestead Exemption
If you're living in the home as your primary residence and don't have a homestead exemption on file, apply immediately at your county appraisal district. It reduces your taxable value by at least $40,000 for school district taxes and provides additional protections.
Property Tax Loans
Texas allows "property tax lenders" — companies that pay your delinquent taxes directly to the taxing authority and then lend you the money, secured by a lien on your property. These loans stop the penalties and prevent a tax sale, but they come with significant costs and risks:
- Interest rates are often 12–18% annually
- Origination fees and closing costs add to the balance
- The lender gets a lien on your property — if you don't pay, they can foreclose
- Some borrowers end up in a worse financial position than before
Tax loans can be a valid tool — especially if they stop the county's clock and give you time to sell — but read the fine print carefully. Make sure you understand what you're agreeing to before signing anything.
Your Real Options When You're Behind on Taxes
Option 1: Pay the Taxes (or Enter a Payment Plan)
If you have access to cash — savings, retirement funds, family help, a home equity line — paying off the delinquent taxes directly stops the penalties and keeps the property. A payment plan with the county is worth asking about if you can't pay all at once.
Option 2: Sell the House Before the Tax Sale
This is often the best option for homeowners who have equity in the property. Delinquent taxes, penalties, and interest are all paid at closing from the sale proceeds — just like a mortgage payoff. You don't have to come up with the money ahead of time.
The key is acting before the tax sale. Once a judgment is entered and the auction is scheduled, time gets very short. If you wait until after the sale, your options become much more limited (and expensive).
Option 3: Use a Tax Loan to Stop the Clock, Then Sell
If a tax sale is imminent but you need more time to sell at a fair price, a tax loan can buy you that time. The loan stops the county's clock; you then sell and pay off the loan at closing. The loan costs money, but it may be worth it to protect your equity.
How Much Equity Are You Actually At Risk of Losing?
This is the math that matters. If your home is worth $180,000 and you owe $12,000 in delinquent taxes, your equity is $168,000. At a tax sale, that equity could be wiped out entirely if the property sells for just the tax amount. Even partial recovery is often only possible through the right of redemption — which requires cash you may not have.
Selling voluntarily — even quickly and at a modest discount — almost always results in more money in your pocket than a tax sale outcome.
Behind on Property Taxes in San Antonio or New Braunfels?
The earlier you call, the more options you have. We help homeowners in exactly this situation — the delinquent taxes get paid at closing from proceeds. You don't need money upfront to move forward.
Tell Us Your Situation → 📞 (830) 264-9899Common Questions
Can I sell a house with delinquent property taxes?
Yes — as long as you still legally own it (no tax sale has occurred). The delinquent taxes, plus all penalties and interest, are paid at closing by the title company before you receive your proceeds. You don't need to clear the taxes before going under contract.
How do I find out exactly how much I owe?
Contact your county appraisal district or tax office. Most Texas counties have online lookup tools where you can search by address or account number and see the full amount owed, including penalties and interest. The delinquent tax attorney handling the account (if applicable) can also give you a payoff figure.
What if a tax lawsuit has already been filed against me?
You can still sell, but you're on a tighter timeline. A sale can satisfy the judgment at closing. If an auction date has been scheduled, contact a real estate attorney or reach out to us immediately — days matter at this point.
What happens if I do nothing?
The taxes, penalties, and interest continue to compound. Eventually, a judgment is obtained and the property is sold at a county tax sale — likely for far less than market value. You lose most or all of your equity.
Can my heirs redeem the property after a tax sale?
Texas's right of redemption can transfer to heirs in some circumstances. But the cost (original sale price plus 25–50%) and the timeline (2 years for homestead) make this difficult. The better path is to prevent the tax sale before it happens.