How to Sell a House Behind on Property Taxes Before It Reaches a Tax Sale

When Property Taxes Become Delinquent

Texas Tax Code §31.02 sets the rule plainly: taxes are due on receipt of the bill and become delinquent if not paid before February 1 of the year following the year the tax was imposed. There's no separate 30- or 60-day cushion after that date — February 1 is the delinquency date itself, and everything else (penalty, interest, the eventual lawsuit) is measured from it.

A supplemental bill issued under a late correction has its own delinquency date of March 1, but for the ordinary annual bill, February 1 is the line. Missing it by even a few days starts the penalty-and-interest schedule below, and it starts automatically — no notice, no grace call, no separate warning letter is required to trigger it.

The Penalty-and-Interest Clock

Once a tax is delinquent, Tax Code §33.01(a) adds a penalty of 6% for the first month, rising 1 percentage point for each additional month, up to a total penalty of 12% by July. On top of that, §33.01(c) adds interest of 1% for every month or partial month the tax remains unpaid — uncapped, accruing for as long as the account stays delinquent. The Comptroller's Property Tax Assistance Division publishes the running penalty-and-interest schedule month by month; this page states the statutory formula itself, since the published figures move with the calendar.

A separate collection penalty layers on top once a taxing unit has contracted with a delinquent-tax attorney, capped under §6.30(c) at 20% of the tax, penalty, and interest collected. Under §33.07, it attaches on July 1 for taxes already delinquent on February 1, after the collector mails notice 30 to 60 days ahead. A second version, §33.08, covers taxes delinquent after that date, on a notice-triggered timeline instead of a fixed one. Two or three years unpaid can mean the 12% penalty, uncapped interest, and the 20% collection penalty all compounding on the same account at once.

Ways to Stop the Bleeding Without Selling

Selling isn't the only lever. Under §33.02, a collector may enter a written installment agreement — equal monthly installments over 12 to 36 months, with interest and (outside a homesteaded exemption case) penalty still accruing on the balance, but no lawsuit or seizure while it's kept.

An owner 65 or older, disabled, or a disabled veteran (or surviving spouse) with the matching exemption can instead pay the year's tax in four equal installments without penalty or interest under §31.031.

The bigger lever for that same group is the §33.06 tax deferral affidavit: filed with the appraisal district, it defers collection on a residence homestead entirely while in effect, at a reduced 5% annual interest rate. It doesn't erase the debt — it runs until the 181st day after the collector's delinquency notice following the date the person no longer owns and occupies the home as a homestead. That is what catches an heir off guard: the 180-day clock starts the moment the qualifying owner's occupancy ends. A separate §33.065 deferral covers a homestead's appreciating value for owners who don't qualify under §33.06.

The Tax Lien: When It Attaches and Why It Beats Everything Else

The lien itself doesn't wait for delinquency. Tax Code §32.01 attaches a lien on January 1 of each year to every property in the state to secure that year's taxes, penalties, and interest — before a bill is even calculated, let alone mailed. And under §32.05, that lien takes priority over a homestead interest and over the claim of any other creditor or lienholder, including a mortgage, regardless of whether that other lien existed first.

That's why selling a house never "wipes" a property tax bill — a sale simply moves the payoff from a future lawsuit to today's closing statement, where the title company pays the taxing units directly out of proceeds before anything reaches the seller.

The Tax Suit and the Tax Sale

If the account stays unresolved, §33.41 lets a taxing unit sue at any time after delinquency to foreclose the tax lien, pursue the owner personally, or both — folding in any other lien it holds on the same property. Court costs and the taxing unit's attorney's fees under §33.48 get added to what's owed. A judgment leads to a §34.01 tax sale — a public auction at the courthouse (or a commissioners-designated location), 10 a.m. to 4 p.m. on the first Tuesday of the month (first Wednesday when that Tuesday is January 1 or July 4). In Dallas County that auction is a constable's sale.

Before the officer running the sale can hand over a deed, §34.015 requires the winning bidder to produce a written Statement of Eligibility to Bid from the county tax assessor-collector, confirming the bidder owes no delinquent taxes of their own anywhere in the county or any school district or municipality inside it.

Redemption After a Tax Sale

A tax sale isn't automatically the end of the line. Under §34.21, a residence homestead, agricultural land, or mineral-interest property carries a two-year redemption period from the deed's filing — a 25% premium in year one, 50% in year two, on top of what the buyer paid plus certain costs. Any other real property gets a much shorter window — 180 days — with the premium a private purchaser can charge capped at 25% regardless of when in that window it happens.

Redemption is real leverage, not a substitute for acting earlier — it means coming up with the full payoff plus a real premium, on a fixed clock, after the property has already changed hands once.

What Happens at Closing

A title company handling a delinquent account starts with a §31.08 tax certificate from the collector, showing every delinquent tax, penalty, interest, and known cost, for a fee capped at $10. That figure, plus the current year's taxes prorated to closing, gets paid out of seller proceeds at the table — the same mechanism that pays off a mortgage.

One complication shows up more often than expected: a property tax loan. Under §32.06 a licensed transferee can pay the delinquent taxes directly to the county in exchange for the tax lien itself — swapping the county's lien for a private lender's. That lender owes a payoff statement on request under Property Code §12.017 (at least seven business days to deliver it), with §32.065 governing what it can include. It adds a second payoff, with its own fee and timeline, for the title company to chase before closing.

Exemptions, the Appraisal Cap, and Protesting the Value

None of the penalty-and-interest math above is affected by condition — a fire, storm damage, vacancy or deferred repairs don't reduce a tax bill. What can is the value side: a homestead exemption under §11.13, the §23.23 cap limiting a homestead's appraised-value increase to 10% per year over the prior year (plus new improvements), and, for owners 65 or older, a frozen "tax ceiling" on the school-district portion of the bill. Disputing the appraised value is separate — filed with the Dallas Central Appraisal District (DCAD), which also handles homestead exemption filings at no charge.

Dallas County's tax bills for most local jurisdictions run through the Dallas County Tax Office, led by Tax Assessor-Collector John R. Ames — the office that issues the §31.08 tax certificate and the §34.015 Statement of Eligibility, and that maintains the county's list of properties held for resale after going unsold at a tax sale.

Get a Cash Offer Before the Next Penalty Date Hits

The earlier you sell against this clock, the more of the equity stays yours instead of the county's or a tax-loan lender's. We buy houses behind on property taxes, the same way we buy anywhere else in the county, with the payoff, penalty and interest built into the offer and paid at closing. Call or text (323) 622-6021.

Related Situations

Dealing with a different situation? See our guide to selling a house in foreclosure or selling a house with liens.