What if the very thing holding you back from selling your home is easier to fix than you ever imagined?
Many Texas homeowners assume that having delinquent property taxes means they’re stuck—unable to sell and trapped by mounting debt. But the truth is, selling your home with delinquent property taxes in Texas isn’t just possible—it could be the lifeline you’ve been looking for.
Delinquent property taxes can feel overwhelming, especially when interest and penalties start piling up. It’s a situation that thousands of Texans face each year, often leading to stress and uncertainty about their options. However, with the right tactics, knowledge and a clear understanding of your rights under Texas law, you can regain control and turn this nightmare into an opportunity for a fresh start.
In this guide, we’ll walk you through everything you need to know about selling a house with delinquent property taxes in Texas. From understanding the legal implications to exploring practical solutions, you’ll gain the confidence to make the best decisions and move forward without fear of the taxman —free from the burden of unpaid taxes.
Understanding Delinquent Property Taxes in Texas
Delinquent property taxes in Texas occur when a homeowner fails to pay their property taxes by the due date. According to the Texas Comptroller of Public Accounts, these unpaid property taxes become a tax debt, accruing interest and tax penalties over time.
The local government relies on these property taxes to fund public services such as schools, infrastructure, and emergency services. When taxes remain unpaid, the taxing authority—often the county tax assessor-collector—places a tax lien on your real property. This tax lien is a legal claim against your property for the property taxes owed and can complicate your ownership and sale of the property.
Unpaid property taxes have serious consequences and may result in foreclosure on the property. If property taxes remain unpaid, the taxing unit at the tax collector’s office may initiate foreclosure proceedings to recover the delinquent taxes. This legal action leads to the sale of your property at a tax foreclosure sale.
Tax Foreclosure Sale and Auction Process
If you are facing a tax foreclosure sale, understanding the auction process is top priority. Once your property is slated for foreclosure, a court order will require it be listed among available properties for public auction with a minimum bid amount attached.
The minimum bid at a property tax sale usually includes the outstanding tax debt, interest, and associated costs. Interested parties, including real estate investors and cash home buyers, participate in this public sale, and the highest bidder can purchase the property. Bidders may need to register in advance and provide a cashier’s check as proof of funds. The winning successful bidder receives a tax deed sale certificate or a tax lien certificate, transferring certain rights to the property.
In Texas, homeowners have a redemption period during which they can reclaim their property. A two-year redemption period applies to homestead properties and agricultural land, provided the property owner is over 65 years of age or qualifies for specific exemptions.
In order to exercise your right of redemption as the original owner, you must pay the bid amount plus additional premiums and interest to redeem the property. Beyond the amount of delinquent taxes, you may be responsible for court costs, legal costs, and other financial obligations associated with the foreclosure process.
Impact on Ownership and Title
Tax foreclosure affects your ability to sell because a property tax lien complicates the ownership of the property and clouds the property deed. Without a clear title, potential buyers will have to pay the tax lien as well as the cost of the property. Any additional liens, such as HOA liens and federal tax liens, must also be addressed. When selling your home, a title search should be completed on the property to identify all tax liabilities or legal claims against the property.
Paying Someone Else’s Property Taxes in Texas
If you are not a struggling homeowner but instead thinking of paying someone else’s property taxes in order to help a loved one, prevent a tax lien foreclosure, or acquire a property interest, this section provides some crucial information. While paying another’s property taxes may seem straightforward, it involves legal and financial implications that require careful consideration and due diligence.
Why Pay Property Taxes for Another Person?
One common scenario is assisting a loved one facing financial hardship, especially if they are advanced in years of age and struggling to manage their property taxes. In such cases, making the tax payment on their behalf can prevent penalties, interest charges, and potential tax lien foreclosure.
Additionally, some real estate investors may pay property taxes on a subject property to secure a future claim or interest, although this does not automatically grant immediate property ownership rights. The rightful owner, as recorded in the county property records, retains legal property ownership unless formal ownership transfer procedures are followed.
How the Property Tax Process Works in Texas
The payment of property taxes in Texas is governed by the Texas Tax Code and payments must be made to the appropriate county tax assessor-collector or appraisal district. Most counties accept certified funds, like money orders or cashier’s checks, for tax payments. Some counties also allow online payment options, credit card checks, or installment agreements for managing larger balances. However, the total amount due — including penalties from previous years — must be paid promptly to avoid further financial repercussions.
Legal Implications and Considerations
While paying someone else’s property taxes might seem like a course to claiming property ownership, it is essential to understand that this action alone does not grant legal ownership rights.
According to the Texas Tax Code, ownership of the property can only be transferred with proper documentation, such as a deed transfer or court order. Additionally, without a formal agreement, the payment of taxes does not entitle the payer to repayment or property interest.
Tax payments are considered a public record, and a tax certificate issued by the county can verify the payment status of a property.
Risks and Best Practices
Before making property tax payments for another individual, it’s crucial to perform your due diligence. Verify the property details, account number, and tax statement with the appraisal district or county treasurer.
Additionally, research the implications of tax delinquency, including how it affects the subject property and its tax year obligations. Failure to do so could result in unexpected complications, such as discovering additional delinquent accounts or encountering disputes with the legal owner.
In certain cases, paying someone else’s taxes might provide a pathway to property acquisition. For instance, if the property is listed for a tax auction due to delinquency, attending the auction and bidding on the property could lead to ownership. However, this requires compliance with the property tax process, including meeting any redemption period outlined in Tax Code Section 34.21.
Assistance and Next Steps
If you’re considering paying property taxes for someone else, consult with a real estate attorney or financial institution to fully understand the implications.
Additionally, explore available resources, such as property tax assistance programs, to learn about installment plans or repayment options. Acting with caution and promptness ensures that your financial and legal interests remain protected while addressing the needs of a delinquent taxpayer or subject property.
Options for Homeowners Facing Delinquent Taxes
If you are a struggling Texas homeowner whose taxes are not being paid by another, you have several options to address delinquency on tax payments:
- Payment Plans with the Tax Office: Setting up a payment plan or repayment plan with the tax office can help manage your tax account, allowing for monthly payments to pay off the taxes owed.
- Property Tax Loans: Property tax lenders offer loans specifically to pay off back taxes owed.
- Sell the Property: Selling your home can be a good idea and practical way to settle debts, using the proceeds of the sale to cover unpaid taxes and avoid foreclosure.
Selling Your House with Delinquent Property Taxes
While selling property with delinquent taxes in Texas might seem challenging, having a clear strategy can make it much more straightforward. When unpaid taxes result in a tax lien, the property title becomes clouded, making it crucial to address these issues before listing your home.
Potential buyers will want assurance that the property is free of liens or that the proceeds of the sale will fully cover the outstanding debt. To address this, consider working with realty professionals experienced in handling properties with tax complications, such as real estate attorneys or agents.
They can guide you through necessary steps like completing a title search, disclosing the tax situation to buyers, and setting an appropriate sale price at current market value to attract interest while settling your debts. For example, here are the major counties in Texas and how to search for delinquent property taxes:
- Property liens in Dallas County –
- Delinquent tax sales in Tarrant County
- Delinquent Property Tax Sales in Harris County
Selling property with delinquent taxes not only helps avoid foreclosure but also provides an opportunity to regain financial stability.
Working with Real Estate Investors
Real estate investors are a valuable resource when selling your house. Investors often purchase properties quickly, which is beneficial if you’re facing a tight amount of time, such as when you are accruing interest on tax debts.
Additionally, many investors buy properties in as-is condition, reducing the need for costly repairs. Your home may be attractive as an investment property, especially if located in desirable areas like Fort Worth or San Antonio.
At Bright Bid Homes, we specialize in purchasing homes quickly for cash, even in challenging situations like property tax delinquency. With our expertise, we can help you resolve your tax burdens efficiently while offering a fair, hassle-free solution to sell your property fast.
Special Considerations in Texas Counties
Each county in Texas may have specific tax rates and processes for selling a property with tax liens.
Check if you qualify for homestead exemptions, tax exemptions, or tax deferrals to reduce your tax liability. Reach out to your county tax assessor-collector office for county-specific information.
Financial Implications and Potential Risks
Remember the broader impact of delinquent taxes. Delinquent taxes affect your overall financial situation and credit score. They also accrue tax penalties and interest, increasing the amount owed over time. Note that the Internal Revenue Service (IRS) may view forgiven debt as taxable income. Not addressing delinquent taxes can severely affect your future credit opportunities and lead to further financial hardship.
Also, be aware of other potential liens on your property.
For example, unpaid HOA dues can result in liens, adding to your financial obligations. Communication with the taxing authorities is crucial to maintaining your property in good order. Some taxing entities may send notifications via text message or email, so ensure your contact information is up to date.
If you own commercial property, different rules and commercial property tax may apply.
Moving Forward With Confidence
Facing delinquent property taxes in Texas is undoubtedly stressful, but you’re not without options. By understanding your rights under Texas law and the processes involved, you can take proactive steps to resolve your tax debt.
Whether through a repayment plan, obtaining a property tax loan, or selling your property, it’s crucial to act swiftly. Engaging with professionals like real estate agents, attorneys, and cash investors can facilitate the process.
Remember, addressing the issue head-on and promptly not only helps avoid foreclosure but also safeguards your financial future.
*Updated 1-3-25
**Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal or financial advice. Real estate transactions, including the sale of residential property during a property tax foreclosure or Delinquent Tax Sale in the state of Texas, involve complex legal processes. Factors such as the time of sale, ownership of a property, winning bid, and issues related to previous owners can significantly affect the sale of the property. Payment options and outcomes may vary. Consult with a qualified professional before making any decisions regarding a home sale or real estate transaction.
*** About the Author: Hilary Schultz is a licensed agent in Texas and professional real estate investor — is a leading authority on DFW metroplex real estate. Hilary is a member of the executive board of her local community PTA and active member of the Texas community. Along with her husband Patrick, they have combined 40 years of experience with over 2800 real estate transactions completed. Read our customer selling experiences to see our commitment to serve the Texas community and provide homeowners with valuable insights, guidance, and a personalized experience through the home selling process. Let us serve you and help to navigate the housing market on your real estate journey.