Can You Avoid Paying Property Taxes? Here’s What Happens
Property taxes are just one of many tax forms used to provide revenue for local governments. Understanding property taxes can be complicated and many property owners might wonder if loopholes exist to avoid paying them entirely. Read on for insights on common misconceptions and what really happens if you try to sidestep your property taxes in Texas.
How Property Taxes Are Calculated
Property taxes and how much you pay depends entirely on the county you live in. Each local county has a tax assessor’s office and a standing ‘mill rate’. The ‘mill rate’ is the number that represents how much tax is levied on a property for every $1,000 of its assessed value. for example, if the mill rate is .03 and your house is assessed at $100,000, your property taxes would be $3,000. If you qualify for any exemptions, like the Texas Homestead exemption, that amount is removed from your ‘assessed value’ and the new amount is multiplied by the mill rate.
Common Myths About Avoiding Property Taxes
There are several myths when it comes to paying taxes. Have you heard the one about not making ‘too much’ money because it would all go to taxes? False. Let’s explore some common property tax myths:
You Can Just Stop Paying and Nothing Will Happen
While many ideas are floating around about taxes, they are mandatory. You’ll be fined and accrue penalties if you don’t pay your property taxes. In July, you’ll be hit with a tax lien; at any point, you could enter into foreclosure proceedings.
Claiming Exemptions Means You Don’t Pay Taxes
There are many tax exemptions in Texas that can help you lower your overall tax bill, but exemptions do not cancel your property taxes entirely. It is important you verify your exemptions and new tax bill with your individual county.
Ignoring The Notices Means the Problem Will Go Away
Those delinquent notices and warnings from the county tax office are important and mean severe consequences are around the corner. Ignoring them will only make the problem worse. Even if you are delinquent on your taxes, options like a property tax loan can eliminate the issue so those notices stop coming in the mail.
What Happens If You Don’t Pay Property Taxes
Penalties
If you haven’t paid property taxes as of February 1st your tax bill is considered delinquent. Starting on this date, penalties and interest continue to accrue throughout the year. Just on February 1st, penalties equal 7% of your tax bill. The largest penalties accrue in July. Check out our penalty chart here for a deeper understanding of the fees you may be faced with.
Tax Lien
In July, if you are still delinquent, your county will place a tax lien on your property, essentially blocking the sale or transfer of the property until the taxes are paid.
Foreclosure
After July 1st, your house can be foreclosed on at any time. The timing varies greatly by county and situation and there are no set guidelines. It can happen in months or years. However, if you are delinquent as of July 1st you are at risk of foreclosure. To complete the foreclosure process, the county must send you a final 21-day Notice of Sale before they can officially foreclose and sell the property. If you pay your unpaid taxes at any point before this final date, the foreclosure process stops and you retain the rights to your home.
Options For Property Tax Relief
If you can’t afford to pay your property taxes, there are options to make it more manageable.
Exemption
Several variations of tax exemptions in the State of Texas can help reduce your overall tax bill. Review our full guide here.
Deferral
If you are over 65 or a disabled veteran you made me able to defer your taxes for as long as you live in the property.
Payment Programs
Many counties offer payment plans to assist you in paying off your property taxes in a more feasible manner.
Property Tax Loans
If you are delinquent on your property taxes and are struggling to find a way to pay them, a property tax loan could be your solution. Some, like the ones at Johnson & Starr are not based on credit score and offer affordable repayment terms.
Johnson & Starr Can Help You Save Your Home
At Johnson & Starr we want to help you stay in your home. Our property tax loans offer flexible repayment terms, no credit checks, and a guaranteed end to foreclosure proceedings. Give us a call today at 877-690-8619.