Penalties, interest and the July 1 collection penalty
How the cost of unpaid property taxes grows each month, and why July 1 matters.
General information, not legal advice. Techoclaro is not a law firm, not the tax office and not connected to any taxing unit. For your situation, talk to free legal aid or a lawyer.
When taxes become late
Taxes are due when the bill arrives and become delinquent if not paid before February 1 of the following year. If the bill was mailed after January 10, the delinquency date moves to a later first-of-the-month printed on the bill.
[Tex. Tax Code §§ 31.02(a), 31.04(a)]
The penalty
The penalty is 6% of the tax for the first month it is late, plus 1% for each additional month or part of a month before July 1. From July 1 the penalty is 12%, no matter how many months have passed, and it does not go higher.
[Tex. Tax Code § 33.01(a)]
Interest
Interest is 1% of the tax for each month or part of a month it stays unpaid. It has no cap and keeps running even after a court judgment. Paying on the 31st instead of the 1st of the next month saves a full month.
[Tex. Tax Code § 33.01(c)]
The collection penalty
Most taxing units hire a delinquent-tax law firm. They may add a penalty of up to 20% of the tax, penalty and interest to taxes still unpaid on July 1, after mailing a notice 30 to 60 days before. A unit that charges this penalty cannot also collect attorney’s fees in a lawsuit.
[Tex. Tax Code §§ 33.07, 6.30(c)]
Half and quarter payments
If your taxing unit allows split payments, the second half is due before July 1 and carries a 12% penalty if missed. Homeowners who are 65+, disabled or disabled veterans may pay in four quarters; a missed quarter carries a 6% penalty plus interest.
[Tex. Tax Code §§ 31.03, 31.031, 33.01(b)]