How Texas Property Tax Delinquency Escalates

In Texas, property taxes are due January 31st each year. After that date, penalties and interest accumulate rapidly under Texas Tax Code Chapter 33:

  • February: 6% penalty + 1% interest added immediately
  • March through June: An additional 1% interest per month continues to accrue
  • July 1: A 20% collection penalty is added — a massive single-day increase
  • After July 1: Delinquent accounts typically transfer to a private law firm, adding attorney fees of 15–20% of the total tax bill
  • After two years of delinquency: The county can file a lawsuit and ultimately foreclose on the property at a courthouse auction

The Tax Lien Follows the Property — Not Just the Owner

A Texas property tax lien attaches to the property itself. This means even if you wanted to sell, the buyer acquires the lien with the deed. The only way to clear a tax lien for a clean title transfer is to pay it off at closing from the sale proceeds. Our title company handles exactly this — the lien is paid directly from escrow and you receive the remaining equity as cash.

What Selling to Us Accomplishes for a Tax Delinquent Property

  • Stops all county collection actions and pending tax foreclosure lawsuits immediately upon closing
  • Tax lien, penalties, interest, and attorney fees are all paid from sale proceeds at closing via the title company
  • If the sale price exceeds all liens and fees, you receive the remaining equity as cash
  • Protects your ability to purchase or rent another home by avoiding a tax foreclosure on your credit record
  • Eliminates ongoing tax bill accumulation — you stop owing taxes on a property you no longer own
  • No repair requirements — we buy in any condition regardless of how long maintenance has been deferred

DFW County Tax Authorities We Work With

Dallas County

Dallas CAD. Civil district courts handle tax foreclosure suits. Monthly courthouse auctions first Tuesday.

Tarrant County

Tarrant Appraisal District. Tax suits filed through district courts. Monthly auctions first Tuesday.

Collin County

Collin CAD covers Plano, McKinney, Frisco, Allen. Active tax collection with fast escalation.

Denton County

Denton CAD. Growing county with increasing enforcement. Lewisville, Flower Mound, The Colony all covered.

Rockwall County

Smaller county with efficient collection processes. Rockwall, Rowlett, Heath, Fate properties.

Kaufman County

Kaufman CAD. Terrell, Forney, Kaufman city, Seagoville, and surrounding communities.

Can I sell after the county has filed a tax lawsuit?
Yes in most cases. Even after a tax lawsuit is filed, you typically retain the right to sell as long as the sale occurs before a final judgment and sheriff’s sale order. The sooner you act the more options you have. Call us at (469) 838-3836 — we will evaluate your timeline immediately.
What if I owe more in taxes than the house is worth?
County tax offices sometimes accept less than the full delinquent amount in hardship situations — similar to an IRS offer in compromise. This is called a tax settlement in Texas. We can discuss whether this might apply to your situation and can refer you to a Texas tax attorney who specializes in this area.
Will I still owe any taxes after closing?
The title company obtains a full payoff statement from every relevant taxing authority and pays all amounts owed at closing. After the sale you are no longer the property owner and are no longer responsible for ongoing property taxes at that address. Any capital gains tax considerations are a matter to discuss with your CPA.
Can a private tax lender payoff be included in the closing?
Yes. Many DFW homeowners behind on taxes have also borrowed from a private tax lending company. Tax lending company liens are handled the same way as mortgage liens at closing — the title company obtains the payoff amount and satisfies the lien from sale proceeds.