FAQs
Questions About Property Taxes
When must I pay my property taxes?
Taxes are due upon receipt of the tax notice but may be paid without penalty and interest until January 31st. Payments are commonly made by mail and MUST BE POSTMARKED by the United States Postal Service on or before January 31st. On February 1st, penalty and interest begin to accrue at 7% and increase monthly until taxes are paid in full, and subject to possible lawsuit.
How are my property taxes determined?
The Central Appraisal District of each County identifies property to be taxed, determines its appraised value, whether to grant exemptions, the taxable owner and address, and which taxing jurisdictions such as the county, city, school districts, etc., may tax the property. Your taxes are computed simply by multiplying the value of your property by the tax rate for each of the entities legally entitled to collect taxes on your property.
What are exemptions? Can they lower my tax bill?
Exemptions reduce the taxable value of the property which lowers your tax amount. Some of these exemptions are:
Residence Homestead: Available for all home owners on their residence as long as they lived there on January 1st of the tax year.
Disabled Homestead: Can be taken in addition to the homestead exemption; available to those who qualify according to specific guidelines.
Disabled veteran or survivor: Can be taken in addition to the homestead exemption, according to a disability rating. This exemption can be taken on any property in Texas; it is not limited to homestead property.
Age 65 or Older: Can be taken in addition to homestead exemption on residence. Homeowners over the age of 65 may also arrange for a Tax Affidavit Deferral. You may choose to defer the collection of taxes if you own and occupy your residence; however, a tax lien remains on the property and interest of 8% a year continues to accrue. A tax deferral allows an elderly or disabled person to abate the collection of delinquent taxes on their homestead. The abatement shall continue until 181 days after the person no longer owns and occupies the homestead. If the elderly or disabled person dies, the deferral shall continue on behalf of a surviving spouse.
The chief appraiser is responsible for administering exemption applications. A property owner or the owner's authorized agent must file any necessary exemption form before May 1 of the tax year. To apply for an exemption, call the Central Appraisal District of your County.
Will the county place a lien on my property?
Actually, Texas state law AUTOMATICALLY places a tax lien on all properties on January 1st of each year to ensure that taxes will be paid. The person who owned the property on January 1 of the tax year is personally liable for the tax payment. Once the taxes are paid, the lien is removed by the county. If the property owner takes out a loan with Tax Advances to pay the taxes, the lien that the county placed on the property is transferred to Tax Advances until the loan has been repaid and then the lien is removed.
What happens if I do not pay my property taxes when due?
Taxes become delinquent on February 1, of each calendar year. A penalty is imposed at the statutory rate of 6% on the 1st day of the delinquency month, and will increase 1% on the 1st day each month thereafter, reaching 12% maximum by July 1. Additionally, Interest is also imposed at the statutory rate of 1% on the 1st day of delinquency, and will increase 1% each month thereafter. Accounts not paid in full by June 30th of the year in which they become delinquent will be referred to the delinquent tax attorney for enforced collection, and will incur an additional penalty up to 20% of the total taxes, penalties, and interest due which means accumulative your total increase in current years tax is now 41.6% over where you started in January and at some point the county will foreclose on your property and have it sold at a public auction on the courthouse steps. The county then applies the money from the foreclosure sale to pay the taxes. You can avoid this situation by obtaining a tax loan from Tax Advances and paying off the property taxes now.
Will the tax office allow me to do a payment plan for my property taxes?
You must check directly with your tax office to see if they are able to offer any type of payment plan for you. Under Texas law, if the county elects to accept a payment plan, it can not exceed 3 years. Also, statute requires the tax office to continue to apply all penalties and interest on the unpaid balance even while you are on a payment plan. Most tax offices require some deposit and an agreed to payment plan. Tax Advances offers loans with terms up to 10 years resulting in a more manageable monthly payment for you.
Questions About Property Tax Loans and Tax Advances LLC
What is a property tax loan?
In Texas you can contract with a third party, like Tax Advances LLC, to pay your taxes on your behalf including taxes, penalties, interest, attorney fees, and court costs. However, this does not eliminate the tax lien on your property. The tax lien is “transferred” to the lender paying your property taxes, until you pay the loan back completely and then the lien is removed from the property. Tax Advances provides you a payment plan to pay back your loan over a period of time from 1-10 years. This allows you to be in control of your budget. Most loans are paid off much earlier than anticipated and we do not charge any prepayment penalties on any residential property tax loans.
What are the benefits of a property tax loan versus a payment plan with the tax office?
Immediately stops mounting penalties, interest and legal costs from the tax office
Prevents foreclosure of your property by the county
While some taxing authorities may offer very limited payment plans, Tax Advances offers flexible payment plans to fit your budget with loan terms up to 10 years
Security in knowing we are here to help. With Tax Advances, our loan servicers work hard to effectively communicate with you to keep your loan payments current to avoid foreclosure action. Our goal is to keep you in your home.
How would my property tax loan be secured?
Each year, on January 1, a lien is automatically placed on every nonexempt real property in the State of Texas to insure the collection of property taxes due that year to the tax office. Tax Advances simply transfers the tax office’s existing lien to our investors until the loan has been repaid at which time the lien is removed.
Can I be approved for a loan if I’ve had credit problems? What about bankruptcy?
Loans are approved for applicants with a broad range of credit histories. Credit challenges or a low score will not disqualify you for a Tax Advances loan. While prior bankruptcies are not a problem, a pending bankruptcy may prevent approval.
May I prepay my loan?
Yes, and you may also make extra payments to lower your balance and pay off your loan faster. There are no prepayment penalties on residential loans.
Will my property be foreclosed upon if I am late or miss a payment?
Foreclosure can be initiated when a loan is delinquent. This process is codified under Texas state law. Notice of default and an opportunity to cure will be provided, but if the default continues, foreclosure proceedings can be started in order to collect the outstanding debt. We work closely with our customers to resolve delinquencies and foreclosure rarely.
What if I owe property taxes for several years?
In most cases we are able to create a loan program that meets your budget while paying off all of the unpaid taxes, penalties, and interest, even if it is for multiple years. We can provide you a single loan allowing for one monthly payment that is manageable and fits into your budget.
Are loans available for any type of property?
Tax Advances loans are available for any type of real estate for which property taxes are levied. This includes residential, commercial, investment properties, and land, developed or undeveloped. The property must be reasonably well maintained.
What if I have other property tax loans with other lenders and owe for the current year?
Tax Advances can provide customized solutions that meet your needs. We would simply obtain the payoffs and pay each of the other loans in full wrapping the balances and the current taxes into a single monthly payment to fit your budget.
Can I sell my home with a tax lien on the property?
You can still sell your property when there is a property tax lien on it, however, you are required to pay off the lien holder before or at the closing before you can disburse any other funds or receive any money from the sale.
Are there tax deductions allowed for interest and closing fees for property tax loans?
This is an important point that we strongly suggest you speak with your tax preparer about.
What laws govern Tax Lien Transfers in Texas?
Texas Tax Lien Lenders must abide by Texas Tax Code Section 32.06 and 32.065. They must be licensed by the Texas Office of Consumer Credit Commissioner under the Texas Finance Code. All loan officers must be licensed by the NMLS.