How Are Property Taxes Paid in Texas?

Property taxes in Texas provide funding for local government services. These taxes are locally assessed and collected, supporting public schools, city and county operations, and various special districts.

Understanding Your Property Tax Bill

Your property tax bill in Texas reflects the value of your property and the tax rates set by local governing bodies. The process begins with the county appraisal district determining the market value of all properties within its jurisdiction as of January 1 each year.

Local taxing units, including school districts, cities, counties, and special districts, then set their individual tax rates based on their budget needs. These rates are applied to your property’s value to calculate the tax owed to each specific entity. Your tax bill will list each taxing entity, its specific tax rate, the appraised value of your property, and any exemptions applied.

Exemptions can reduce the taxable value of your property. The most common exemption is the homestead exemption, which applies to your primary residence and reduces the taxable value for school district taxes. A general homestead exemption can lower the taxable value by $100,000 for school tax calculations. Additional exemptions are available for those aged 65 or older and individuals with disabilities. These exemptions also reduce taxable value and can freeze the school tax amount.

Methods for Paying Property Taxes

Once you receive your property tax bill, typically mailed in October, several payment options are available before the January 31 deadline. Many local tax assessor-collector offices offer online payment portals, allowing you to pay using credit cards or e-checks. Credit card payments may incur processing fees.

Payments can also be submitted by mail using a check or money order, ensuring the payment is postmarked by the due date. For those preferring in-person transactions, tax offices accept various payment types, including checks, money orders, and sometimes cash. Verify accepted payment methods with your local tax office.

For many homeowners, property taxes are managed through a mortgage escrow account. A portion of your estimated annual property taxes is included in your monthly mortgage payment and deposited into a separate escrow account. When property taxes become due, your mortgage lender uses these accumulated funds to pay the tax bill on your behalf, ensuring timely payment. If you do not have an escrow account, you are responsible for paying the lump sum directly to the taxing authorities.

Texas law also provides for installment payment plans under certain conditions. Homeowners aged 65 or older, disabled individuals, and disabled veterans may pay their homestead taxes in four equal installments without incurring penalties or interest. The first installment is due by January 31, with subsequent payments due by April 1, June 1, and August 1. To opt into this plan, you must provide written notice with your first payment.

Key Deadlines and Late Payment Implications

Property taxes in Texas are issued around October 1 each year and are due upon receipt. The standard deadline for payment is January 31 of the following year. If taxes are not paid by this date, they become delinquent on February 1.

Once taxes become delinquent, penalties and interest begin to accrue immediately. An initial penalty of 6% of the tax bill and 1% interest are applied on February 1. This penalty increases by 1% each month, reaching a maximum of 12% by July 1, while interest continues to accrue at 1% per month. If taxes remain unpaid, an additional collection fee of up to 20% for attorney fees may be added, typically starting July 1.

Failing to pay property taxes can lead to serious consequences. A tax lien is automatically placed on your property on January 1 each year to secure the tax liability. If delinquent taxes remain unpaid, taxing authorities can initiate legal action to recover the debt. This can include referral to collection attorneys, filing lawsuits, and ultimately, foreclosure proceedings that may result in the property being sold at a public auction.