Property Tax Debt Help in Houston, TX

Property Tax Debt Help in Houston, TX

Do You Have Have Property Tax Debt?

Property taxes, sometimes called ad valorem taxes, fund Texas state, county and city governments, school systems and other activities. Property taxes are assessed as of January 1st each year, are technically due in October of the year they are assessed, and are subject to interest if not timely paid (usually by February 1st of the year after assessment). For example, property taxes for the 2016 tax year will be assessed on January 1, 2016, will technically be due on October 1, 2016, and will be considered late if not paid prior to February 1, 2017.

If property taxes are not paid late, interest accrues at a rate of 12%.  If property taxes are not paid by June 30th of the year after assessment, a penalty is added.  Using the example of the 2016 tax year, interest will begin to accrue on February 1, 2017. Penalties, in addition to interest, will be charged if the taxes are not paid by June 30, 2017.

The taxing entity has a statutory lien on the property taxed.  The lien can be foreclosed if property taxes are not paid.  Accordingly, it is important to pay property taxes. 

Many mortgage companies require borrowers to maintain escrow accounts to ensure payment of property taxes.  Federal regulations govern escrow accounts and escrow accounting.

Some mortgage companies do not require escrow accounts, but reserve a right to pay past-due property taxes to protect their interests. In such events, the borrowers’ failure to pay property taxes may be considered a default in the mortgage and may lead to the property being posted for foreclosure.

What is Your Next Step in Property Tax Debt?

If you cannot afford to make payments on property taxes, you should speak with a bankruptcy attorney prior to taking on tax loans. Property tax loans have very high interest and strict repayment terms. It can be very difficult to pay off property tax loans due to high interest rates. Property tax loans give the lender a lien on your home. If you get behind on payments to a property tax lender, they have the ability to foreclose on your home.

Texas law allows you to claim a tax exemption for your homestead, which can substantially reduce your property tax liability. Texans who are over 65 years of age or who are disabled qualify for additional exemptions on their homesteads. These exemptions are not automatic. You must apply for the exemptions with your local taxing authority and verify every year that the exemptions are still in place.

If you are over 65 years of age or disabled, you may qualify to have your property taxes deferred under Texas law. This prevents the taxing authority from collecting some or all of your taxes, including delinquent taxes. When your taxes are deferred, the taxing authority still assesses taxes each year and charges interest on the amounts owed. However, you can continue to live in the home without making payments on the taxes. When your home is sold or at the time of your death, all deferred taxes plus interest become due.

Keeling Law Firm regularly handles property tax issues.  If you have a financial problem with your property taxes, contact us for a no-cost consultation.

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