What Are Property Tax Deferrals?
If you’re a Texas homeowner, chances are you’re familiar with property taxes, but what is a property tax deferral, and who qualifies?
A property tax deferral allows you to put off paying your property taxes for a certain period. It’s important to note that a property tax deferral does not mean you’ll never have to pay your property tax bill like an exemption would. It only postpones your payment.
Who is Eligible?
- A homeowner who is 65 or older. Under Texas law, a person 65 years of age or older is allowed to defer their property taxes on their homestead until either they move out of the home, or their estates are settled after death.
- A disabled person. (As defined by Section 11.13(m) of the Texas Property Tax Code)
- A disabled Veteran. (As defined by Section 11.2 of the Texas Property Tax Code)
During the deferral period, unpaid property taxes will accrue interest at a rate of 5% per year according to Texas law. However, once an over-65 or disability deferral has been granted, additional charges cannot be levied for delinquent penalty and interest.
It’s important to note the difference between a tax deferral and a homestead exemption. A homestead exemption removes part of your home’s value from being taxed, ultimately helping to lower your overall taxes. A tax deferral, on the other hand, does not lower property taxes, it only prolongs them, and they still must eventually be paid off.
When Does a Property Tax Deferral End?
According to the Texas Comptroller, “The deferral period in Texas ends on the date the homeowner that qualified for the tax deferral no longer owns or occupies the property as their residence homestead.” If the person who applied dies, the deferral passes to the person’s surviving spouse if they meet these conditions:
- The spouse is 55 or older;
- They own the residence and;
- They were living in the home at the time of the death
Once the deferral has ended, the person or spouse has 180 days to pay all accrued taxes, penalties, and interest. If the full payment is not made within the 180-day window, the entire amount becomes delinquent, and the property is at risk of foreclosure.
What Are My Options if I’m Not Able to Pay the Property Taxes that Have Been Passed on to Me?
If you have inherited a home with deferred property taxes that you are unable to pay, we may be able to help you. Contact us today and an experienced loan officer will help walk you through your options.