People who own real property in Texas have to pay property taxes. If you get behind in paying your real property taxes, you might lose your home to a tax foreclosure. Here we will explain what a Property Tax Foreclosure is.

Billions of dollars of property taxes go delinquent every year, creating a predicament for local municipalities that depend on this money to fund public services. 

When we examine foreclosure, we think about property owners falling behind on their mortgage payments but most of the time foreclosures deal with property taxes. 

Things you might be astonished to learn regarding property tax foreclosures:

  • On January 1st of the taxing year, taxing entities place a tax lien on unpaid property taxes. A tax lien makes the property act as collateral for the debt. 
  • If property taxes are not paid in full by June 31st of the taxing year, the county can foreclose on that property 
  • Property owners always have the chance to get current on delinquent amounts, penalties, interest, fees, & costs before a foreclosure sale
  • If a property is foreclosed on there is time after to reclaim the property by “redeeming it”

Once the tax lien foreclosure process begins, it can be frustrating and very costly. On July 1st, unpaid property tax accounts will be turned over to county collection attorneys who will file suit on the property. This is the start of the foreclosure process. When the suit is filed on the property, the property owner will receive a written notice of the suit. At this point if the property owner cannot pay off the delinquent amount, penalties, interest, fees, & costs, the court will enter a judgment on the property. After this, the court can sell the property to the highest bidder at a public auction. The minimum bid is usually the total amount of the jugement, which includes owed taxes, penalties, interest, fees, & costs or the market value of the home, whichever is less. The buyer then gets the deed/title to the property. 

If you lose your property at a tax foreclosure and it was your residence homestead or land that was designated for agricultural use,, the property can be redeemed at any time up to two years after the date the deed is filed in the county records. To redeem the property you must:

  • Pay the amount the purchaser bid on the property 
  • Pay the amount of the deed recording fee
  • Pay the amount the purchaser paid for taxes, penalties, interest, fees, & costs on the property
  • Pay a redemption premium of 25% of the aggregate total if you redeem during the first year or 50% of the aggregate total if you redeem during the second year of the redemption period

If you find your property in a property tax suit, Ovation Lending can help! We have helped many property owners get their properties out of tax foreclosure. If you need our help, give us a call to find out what options you have! 877-419-7392.