A Guide to Property Tax Deferrals in Texas
Gripped by an uncertain economy, many Texans are experiencing difficulties with debt, including delinquent property taxes. In fact, each year more than 100,000 Texans fall behind on their property taxes for at least some period of time. If property taxes go unpaid for too long though, it can put your property at risk of foreclosure. So, what do you do if you can’t pay your property taxes? Well depending on several factors, you may be able to defer them. Continue reading for our guide on property tax deferment in Texas.
What Is Property Tax Deferral?
There are two ways to legally avoid paying your delinquent taxes, tax exemption and tax deferral. Property tax deferment means you can postpone paying your delinquent property taxes on your home for as long as you own it and live in it. A deferment only postpones your taxes, it doesn’t eliminate them.
Interest and Penalties
You’ll still accrue interest, at a rate of 5% a year, on your delinquent property taxes. All penalties, interest, and delinquent taxes will be due at the end of the deferral period. A deferral is different than an exemption, which cancels part of your existing delinquent tax bill. Even with a deferral, a tax lien will stay on your property for as long as the taxes go unpaid.
If You Have A Mortgage
If your home is still subject to a mortgage, consult your loan officer before applying. Some mortgage companies may be able to foreclose if a deferment violates the terms of the deed of trust. Some deeds of trusts permit the mortgage company to foreclose if property taxes are not paid on time.
Types of Tax Deferral
Let’s take a brief look at the different deferral options in Texas.
Homeowners 65 and Older
If you are age 65 or older and live in the home you own property taxes on, you qualify for a deferral on your delinquent taxes until you no longer own the property or live in it. If your home has already faced judgment or has a pending tax sale, you can stop it by applying for tax deferral.
Disabled Homeowners
If you are disabled, you may also qualify for a property tax deferment. To qualify you must either:
- Be unable to engage in gainful work because of a physical or mental disability.
- You receive disability benefits under the federal Old Age, Survivors, and Disability Insurance Program through the Social Security Administration.
You may need to provide medical verification of your disability to qualify.
Disabled Veterans
If you are a disabled veteran, you may also qualify for a property tax deferment. You’ll need to provide proof of your disability and veteran status to qualify.
Active Military Personnel
In the State of Texas, any active-duty military personnel serving during a war or national emergency outside the State of Texas qualify for a tax deferral and a waiver of penalties and interest. The deferral only applies to any taxes accrued after the date of deployment out of the state of Texas.
How To Defer Your Delinquent Property Taxes
If you are an eligible homeowner, you can obtain a deferral by filing a deferral affidavit with your county Central Appraisal District. Many appraisal districts offer forms and directions online.
What Happens When the Deferral Ends?
When the tax deferral period ends, all delinquent property taxes, interest, and penalties become due. All accrued taxes, penalties, and interest must be paid within 180 days of the end of the deferral. On the 181st day, any unpaid portions become delinquent making your home eligible for property tax foreclosure.
If the person who applied for the deferral dies, the deferral passes to the person’s surviving spouse, if the spouse is 55 or older, owns the residence, and was living in it at the time of death. If there is no living spouse, the tax bill in its entirety is passed to the parties who inherit the estate.
Johnson & Starr Can Help
While a property tax deferment can help you stay out of property tax foreclosure, penalties will still continue to accrue, leaving you with debt you could pass on to your loved ones. Johnson & Starr can help you pay your delinquent taxes once and for all. Give us a call at 1-800-203-9157 or book your 15-minute loan consultation here.