person holding key in front of their new home

When is a New Homeowner Liable for Property Tax in Texas?

Buying your first home is an exciting experience but can also be a bit overwhelming —especially when it comes to budgeting for costs like property taxes. Keep reading to learn a few basics about Texas property taxes and when first-time homebuyers in Texas are liable for property tax.

What are Property Taxes? 

If you’re a first-time homebuyer in Texas, you may wonder, what are property taxes, and what makes Texas property taxes different from other states? Property tax is the annual amount paid by property owners based on the value of their residential property or business. In Texas, the property tax is used to help pay for schools, streets, roads, police, fire protection, and other local services. Learn more about the Texas property tax process.

When do You Start Paying Property Taxes on Your New Home? 

The short answer: after taking ownership of a property in Texas, you’re likely to pay a minimum of three months’ worth of property taxes when you close on the purchase of the home. For example, if your closing day is on July 1, the seller will pay six months’ worth of property taxes, and you’ll pay at least three months of property taxes in advance. 

However, there are instances where homeowners are required to pay the first year of taxes as part of the closing costs. Some property owners also offer to pay taxes for the full year to make the property more attractive to prospective buyers. It will depend on your unique situation with the seller. Also, keep in mind that the current owner of a property is liable for property taxes. If you took ownership of a property without closing through a title company or using a realtor, check with your local tax office to see if there is a property tax balance owed. 

When it comes to property tax liability and calculating costs of who owes what, typically, your realtor and the title company should be able to explain these costs when you’re working out the sales agreement. 

How We Can Help 

Property tax loans offer the convenience of potentially lower interest rates and repayment on a schedule that accommodates your unique situation, all while leaving your credit card open for other needs or emergencies that may arise. Contact us today so we can work together on a plan to take control of your property taxes.