In Texas, property taxes hold significant importance. Unlike many states, Texas has no income tax and a low sales tax, making property taxes the primary source of funding for local governments. Thus, prompt, and complete payment of property taxes becomes essential for critical public services to be maintained.
When property taxes aren’t paid on time, it can lead to severe consequences and hefty penalties, rapidly increasing the total amount owed by the property owner and making it substantially higher than the initial tax amount.
It’s crucial for property owners in Texas to prioritize timely payment of their property taxes to avoid these severe penalties and potential legal ramifications. In this blog, we’ll explore the consequences of delinquent taxes in Texas and the risks involved if you neglect timely property tax payments in Texas.
Understanding the Penalties
Monthly Penalties
Delinquency begins on February 1st. If your taxes are unpaid by February 1st, you incur a 6% penalty for the first month. Between March and June, an additional 1% penalty is added each month your taxes remain unpaid. By June 30th, the total penalty on your original tax bill can reach 12%.
Interest Charges
On July 1st, the monthly penalties stop accumulating, but you’ll still be charged 1% monthly interest on the entire outstanding amount (including penalties). This translates to 12% annual interest for as long as the taxes remain unpaid.
Additional Costs
After June 1st, you may also be charged up to 20% in collection and attorney fees if the taxing entity needs to take legal action to collect your delinquent taxes.
Consequences of Non-Payment
Failure to address unpaid property taxes results in a growing financial burden due to compounding penalties and interest. Additionally, non-payment can lead to the imposition of a tax lien on your property, giving the tax office a legal claim to your property until the tax debt is cleared. This lien can impede property sales or refinancing.
In dire cases of prolonged non-payment, the taxing entity can initiate foreclosure proceedings, leading to the seizure and sale of your property to cover the unpaid tax debt.
How a Reputed Property Tax Consultant Like Alamo Ad Valorem Can Help?
A property tax consultant can be a valuable ally to help alleviate high property tax bills to prevent property taxes from going delinquent. If you are currently in a delinquent state and are facing foreclosure due to tax liens, please consult a real estate attorney. Alamo Ad Valorem cannot give legal advice on this matter but here are some ways Alamo Ad Valorem CAN help:
- Understanding penalties and fees: Our consultants can explain the intricate web of penalties and fees associated with delinquent taxes, helping you avoid the risk of financial burdens.
- Review exemptions: We can review and identify any exemptions that are applicable to your situation, this, combined with appealing your assessment can help prevent your tax bills from skyrocketing.
- Appealing your assessment: If you believe your property’s value was assessed incorrectly, the experienced tax consultants at Alamo Ad Valorem can guide you through the appeal process and prepare the necessary documentation.
Conclusion
Paying taxes is considered a fundamental civic duty that contributes to the collective well-being of the community. It’s always in your best interest to pay your property taxes on time to avoid these penalties and fees. Knowing your taxes are settled also eliminates stress and anxiety around potential legal consequences. Contact Alamo Ad Valorem to see how we can help lower your property tax burden.