I Inherited Delinquent Property Taxes — What Do I Do?
Property taxes can be confusing to anyone, but if you’ve inherited a home that has preexisting delinquent property taxes, the situation can be even more complicated. Who’s responsible for the taxes? What if you are a joint owner of the property? What if the new owner is a minor? Can you sell the home you’ve inherited, or do you have to pay the delinquent taxes first? Read on for a full guide on how to handle inherited delinquent property taxes.
Assess The Situation: Confirming The Delinquency
If you’ve inherited a property that has delinquent taxes, your first step is to confirm the delinquency by calling your local tax assessor’s office or county tax office. Be sure to request documents that outline all outstanding taxes, penalties, fees, and interest. Also be sure to verify any existing tax liens on the property as these affect your ability to sell or transfer the property without paying the outstanding taxes.
Confirm How Much You Owe
Ultimately, it’s the executor of any estate that is responsible for unpaid taxes upon an estate owner’s death. Typically, if an executor is named to the estate, they will find ways to cover the delinquency utilizing assets from the estate before transferring the title to those who will inherit the property. If there is not executor, sometimes the state will name one.
In situations where property is passed directly, the following applies. If you are the sole inheritor of the property, then you owe 100% of the delinquent property taxes, in addition to any estate or inheritance taxes you may have to pay. Read more about that here. If you have inherited the property with multiple people, you are only responsible for the taxes on the part of the property you own. For example, if you own 30% of the property, you’ll be responsible for 30% of the tax bill. If the property is passed to a minor, then the executor of the will is responsible for the taxes.
Verifying Relief Options
If you’ve inherited the home and you plan to use it as your primary residence, you could qualify for the homestead extension, which, as of 2024, was raised from $40,000 to $100,000. When you apply you will want to make sure you are listed as the “heir property owner” when filling out Form 50-114.
If you are aged 65 or older when you inherit the property or a disabled veteran, you may qualify for tax deferment. While it won’t eliminate your taxes, it will allow you to stay in the inherited property as your primary residence until your death without facing foreclosure. The state of Texas has a number of exemptions and deferment options, be sure to evaluate any eligibility for existing options in your county that could help you lower your outstanding tax bills.
Options For Covering the Delinquent Taxes
Using The Estate
If you’ve inherited additional assets outside of the property in question, you can liquidate those assets to cover the property taxes.
Consider A Payment Plan
Most counties offer payment plans for those who can’t afford to pay their property taxes in one payment. Consider calling your local office and see what payment plans they offer for your situation.
Sell The Property
You can sell the property to pay the taxes, even if you have an existing tax lien but it is a complicated process. You’ll need to pay the taxes during the sale and need an attorney to assist you.
Property Tax Loan
One of the simplest ways to cover delinquent property taxes is to secure a loan through a company like Johnson and Starr, to avoid any further complications with your new home.
Johnson & Starr Can Help
If you decide to keep your inherited property as a rental home or use it as your primary residence but are not prepared to pay the outstanding tax bill, a Johnson & Starr residential property tax loan is a great solution. Johnson & Starr offers Texas property owners fair, flexible, and easy-to-understand loans that relieve the stress of burdensome past-due property tax bills. Contact us today so, we can work together on a plan to take control of your property taxes.