What is a Property Tax Lien?
If you own property in Texas, or anywhere in the United States, you’re required to pay some level of property taxes each year. These taxes help fund essential public services like schools, police and fire departments, and local infrastructure. But if property taxes aren’t paid on time, the local government has a powerful legal tool to collect the debt — a property tax lien. Understanding what a property tax lien is and how it works can help you avoid serious financial and legal consequences.
A Lien Means the Government has a Claim on Your Property
A property tax lien is a legal claim placed on a home, land, or commercial building by the local government when property taxes are overdue. This lien essentially says, “The government has first rights to this property until the debt is paid.” Unlike other types of liens, such as those from unpaid contractors or lenders, a tax lien takes priority. That means if the property is sold or refinanced, the lien must be paid off before the owner receives any proceeds.
A Property Tax Lien is Public Record
Once a lien is placed, it becomes a matter of public record. While regular property tax debts in Texas typically do NOT impact your credit, a lien can hurt your credit and make it harder to borrow money for other uses. In some areas of the US, counties or municipalities sell tax lien certificates to investors. These investors pay the delinquent taxes up front in exchange for the right to collect the debt — often with added interest and fees. However, this is one way that Texas is different from many other states. Many states utilize tax lien sales (where investors purchase the lien and collect the debt plus interest), Texas primarily employs tax deed sales. This means the property itself is sold at auction, not just the lien.
Property Tax Debt is a High Priority
Debt of any kind is no fun. It is estimated that more than 77% of American families are in debt. While everyone’s situation is different, a property tax lien in Texas may be the highest priority to take care of, because it can lead to the loss of your home.
There is Help for Overdue Property Taxes and Tax Liens
The good news is that property tax liens can often be resolved without losing your home. Most local governments will work with property owners to set up payment plans, waive certain penalties, or give extra time to get caught up. If those options are exhausted, a property tax loan may be your best solution.
At Johnson & Starr, we help homeowners navigate the complex process of dealing with property tax liens. Whether you’re just behind on payments or already facing a tax sale, our team can explain your options and create a path forward. If you’ve received notice of a property tax lien, don’t wait — the sooner you act, the easier it will be to find a solution.
Contact us today to speak with one of our Texas property tax experts.