How to stop tax foreclosure in Texas

When property taxes go unpaid, the taxing unit can use the courts to collect the debt and foreclose the tax lien on the property.

In Texas, a taxing unit may file a foreclosure lawsuit once the property taxes are delinquent. If the court enters judgment for the taxes, the property can then be ordered sold to satisfy the debt.

Before it reaches that point, the amount owed can continue to grow through penalties, interest, collection fees, and court costs. The sooner you know where you are in the process, the more useful your options may be.

If your lender is foreclosing because of missed mortgage payments, that is a different process. See our guide on how to stop foreclosure.

Tax bill due
Property taxes are generally due when the tax bill is received and, in most cases, must be paid by January 31. If the bill is mailed late, the delinquency date can be postponed.

February 1: Taxes become delinquent
For most property tax bills, unpaid taxes become delinquent on February 1. A 6% penalty and 1% interest are added at that point.

February through June: Penalties and interest continue to grow
The penalty increases each month until it reaches 12% on July 1. Interest continues at 1% per month for as long as the taxes remain delinquent.

July 1: Collection costs may increase
If the account qualifies and has been referred for collection, an additional penalty of up to 20% may be added to cover collection costs.

Lawsuit filed
There is no statewide rule requiring the taxing unit to wait 12 or 18 months. Once the taxes are delinquent, a taxing unit may file a lawsuit to collect the debt and foreclose its tax lien. When that happens varies by taxing authority and account.

Judgment and order of sale
If the taxing unit obtains a judgment, the court can order the property sold to satisfy the delinquent taxes and related amounts.

Tax sale
Texas tax foreclosure sales generally take place on the first Tuesday of the month. The property is sold through a public tax sale under the court’s order.

Source: Texas Tax Code §§31, 33, and 34; Texas Comptroller property-tax guidance.

A tax sale does not always end a former owner’s rights immediately. Texas law gives some property owners a limited period to redeem the property, meaning buy it back after the tax sale. Source: Texas Tax Code §34.21

For a residence homestead or qualifying agricultural property, the redemption period is generally two years from the date the purchaser’s deed is filed for record.

For many other properties, the redemption period is generally 180 days from the date the purchaser’s deed is filed for record.

Redeeming the property can be expensive. When a qualifying homestead is purchased by a private buyer at the tax sale, the former owner generally must reimburse the purchaser for the purchase price and certain allowable costs, plus a redemption premium of 25% during the first year or 50% during the second year.

The redemption period gives you another legal option after the sale, but acting before the tax sale is usually much less expensive.

Pay the delinquent taxes

The most direct way to stop a tax foreclosure is to pay the amount required to satisfy the delinquency before the property is sold. That amount may include the unpaid taxes, penalties, interest, collection costs, and court costs.

Contact the tax office or the attorney handling the account for a current payoff amount. If a sale has already been scheduled, confirm what must be paid and by when for the sale to be canceled.

Set up a payment plan

If paying everything at once is not realistic, ask the tax collector about an installment agreement.

Texas law gives qualifying residence-homestead owners a right to request a payment agreement in certain circumstances. These agreements can extend for up to 36 months. As long as you comply with the agreement and its conditions, collection action on the covered delinquent taxes is generally paused.

Contact the tax office as early as possible so you know whether you qualify and what payment would be required.

Check whether you missed an exemption

If you should have received a homestead or other property-tax exemption but never applied, check with your county appraisal district.

Some exemptions can be filed late. If a late application is approved, the appraisal district can correct the taxable value and the amount owed for the affected year. That may reduce the delinquent balance, although it does not automatically eliminate a foreclosure case.

Homestead, age 65 or older, disability, and disabled-veteran exemptions each have their own eligibility and filing rules.

Tax deferral for qualifying homeowners

Certain homeowners who are age 65 or older, disabled, or qualifying disabled veterans may be able to defer collection of property taxes on their residence homestead.

A tax deferral does not erase the debt. The tax lien remains, and the deferred amount generally accrues interest at 5% per year. But an eligible deferral can postpone collection and may be used to stop a pending tax foreclosure suit or tax sale.

To request a deferral, file the appropriate tax-deferral affidavit with the county appraisal district.

Sell the property before the tax sale

If paying or deferring the taxes is not workable and the property has enough equity, selling before the tax sale may be another option.

Delinquent property taxes and other amounts that must be cleared for closing can generally be paid from the sale proceeds. The closer the property gets to its scheduled tax sale, the less time there is to resolve title issues, obtain payoff information, and complete the sale.

Big State works with Houston and DFW homeowners dealing with delinquent property taxes and can help determine whether an as-is sale can be completed within the time available.

File for bankruptcy

Filing bankruptcy generally triggers an automatic stay that temporarily stops most collection activity, including foreclosure proceedings. Bankruptcy does not simply erase property-tax debt, and whether it is an appropriate option depends on your broader financial situation.

If a tax sale is approaching and you are considering bankruptcy, speak with a bankruptcy attorney soon.

A growing balance

Waiting can make delinquent property taxes more expensive. Penalties and interest continue to accrue, and collection or court costs may be added as the case progresses. Get a current payoff amount rather than relying on the original tax bill.

Property-tax loans

A property-tax lender can pay the taxes for you and receive a lien on the property in return. That may stop the immediate tax collection problem, but it replaces the tax debt with a private loan secured by your home. Before agreeing, compare the interest rate, fees, repayment terms, and what happens if you miss payments.

Foreclosure rescue offers

Be cautious of anyone who guarantees they can save the property, pressures you to act immediately, asks for large upfront fees, or wants you to sign documents you do not fully understand. Verify who you are dealing with before you pay or transfer any ownership interest.

Property tax debt gets more expensive and harder to resolve as the case moves toward a tax sale. Knowing where you are in the process gives you more time to choose the option that makes sense for you.

If selling may be part of your solution, Big State buys homes before the tax sale. Want to see what it looks like to sell as-is and move forward? Hear from a seller who chose a simpler path and see what we took off their plate. All our seller stories are verified with a review link.