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Delinquent Property Taxes: 15 Terms Every Texan Should Know

Texans who are delinquent on paying their property taxes might face unfamiliar property tax terminology during their time of delinquency. Luckily, if you are ever struggling to make sense of what certain property tax terms mean, this glossary of definitions can help. Here are 15 terms you may see on your delinquent property tax bill to help you better understand this process.

1. Ad Valorem Tax

Ad valorem is a Latin phrase that translates to “According to value”. The ad valorem tax is a tax based on the assessed value of an item, in this case your property.

2. Appraisal

A property appraisal determines how much a taxable property is worth, also known as the assessed value. Appraisal values are determined by the current fair market value of your property and are estimated by an appraiser. An appraiser will analyze factors such as property size, construction type, age, location, sales of comparable properties, etc. Learn more: County Appraisal Process in Texas.

3. Appraisal District

This is a political subdivision of the state that is governed by a board of directors and is responsible for appraising property for property tax purposes for each taxing unit.

4. Appraisal Review Board (ARB)

If a property owner wants to dispute their appraised property value, the ARB will review the disagreement between property owner and the appraisal district. The ARB will then come to a conclusion on the correct appraised value. Learn more from the Texas Comptroller.

5. Assessed Value

Total assessed value is how much a property is worth in comparison to others around it. It is calculated by taking the market value of the property minus any exemptions, which is then used to calculate property taxes.

6. Deferral

Only the Texans who qualify for a deferral and fit the proper requirements may postpone paying current and delinquent property taxes on their homes by signing a tax deferral affidavit. Taxes will be deferred, but not cancelled, as long as the owner continues to own and live in the home. This keeps homeowners from losing their homesteads due to delinquent property taxes. Learn more about property tax deferrals here.

7. Delinquency

In Texas, property taxes are considered delinquent if your property tax bill has not been paid in full by the end of January each year. Once delinquent, you are subject to a 7% penalty, and from there, interest and penalties continue, with one of the largest penalties coming in July for most counties. For each month that you remain past due, your rate will increase by another 2% until taxes are fully paid off.

8. Exemption

An exemption can remove a percentage or dollar amount of a property’s taxation value (partial exemption), or it can remove eligible properties from taxation altogether (absolute exemption). Exemptions can be offered by the state or local taxing authorities. Learn more from the Texas Comptroller.

9. Foreclosure

Foreclosure is the action of the action of taking ownership or possession of a property when the property owner fails to keep up their payments. The foreclosed upon property is sold at a public auction.

10. Formal Hearing

This occurs when a property owner protests their property taxes and can’t come to an agreement with the tax assessor during their informal hearing. The property owner will attend a formal hearing along with an appraiser, who will go before the ARB to determine the final decision on the property’s protest.

11. Informal Hearing

When protesting property taxes, an informal hearing is the first step in the process. The property owner will meet in-person with an appraiser to try and prove their belief on why the appraised value is incorrect. In most cases, property owners will receive an adjustment, however, if an agreement cannot be reached, a formal hearing will occur.

12. Property Tax Lien

A lien is automatically placed on a property when an owner fails to pay their property taxes in a timely manner. This is a legal way to use the tax debtor’s property as collateral to make sure all taxes, penalties, fees and interest are eventually paid for. If the taxes go unpaid, the state has the right to seize the homeowner’s property and sell it. Learn more about the different types of property liens in Texas.

13. Property Tax Loan

A lender that pays a homeowner’s delinquent taxes to the Tax Collector and sets up a payment plan for the homeowner to pay them back in a way that is flexible and affordable. This allows a homeowner to avoid paying extra penalties, fees and interest to the county (you can receive a property tax loan from Johnson & Starr).

14. Protest

When a homeowner disagrees with the appraised value of their property, they have the right to file for a protest. Learn more about how to protest your property tax in Texas.

15. Valuation

The estimation of a property’s current and future value.

We Can Help

While you may want to better understand delinquent property tax terminology, it is also crucial to pay your Texas property taxes as soon as possible. With the July 1st penalty quickly approaching, it is important to stay on top of your property tax bill before it is too late.

If you are unsure how to pay your property taxes off on your own, Johnson & Starr can help. We will immediately pay the entire tax bill on your home and set up a flexible repayment plan for you. For more information on our property tax loans or if you need help answering any of your questions, give us a call today at (888) 929-4731.