Behind on Property Taxes in Dallas-Fort Worth? You Can Still Sell

Texas property taxes become delinquent on February 1. That day the account takes a six percent penalty plus one percent interest. The penalty then climbs one percent per month, reaching twelve percent on July 1, while interest keeps adding one percent per month with no ceiling.

July 1 is the date that changes the situation. Most Texas taxing units turn remaining delinquent accounts over to outside collection attorneys, and the statute allows an additional collection penalty of up to twenty percent of the unpaid balance to be added on top of everything already accrued. A bill that was manageable in January can be roughly a third larger by midsummer, before the second year of delinquency even begins.

This is why waiting is the most expensive option. Unlike a mortgage, where a lender may work with you for months, tax debt escalates on a fixed statutory schedule that nobody has discretion to pause.

People often assume they are safe because they are current on their mortgage, or because they own the house outright with no mortgage at all. Neither protects you. Texas taxing units can sue to foreclose their tax lien independently, and a house owned free and clear is fully exposed to it.

A tax lien in Texas is also superior to most other liens on the property, which means it comes ahead of a mortgage in priority. If the case proceeds to a sheriff's sale, the property can be sold for an amount that satisfies the taxes and costs — frequently a small fraction of what the house is actually worth. Any equity above that is not automatically protected simply because it existed.

Owners in this position are usually not careless. They inherited a house with taxes already behind, lost the homestead exemption when a parent died and the bill jumped, had a lender stop escrowing, or hit a stretch where the tax bill lost to the medical bill. The reason rarely changes what the calendar does.

This is the single most common misunderstanding we encounter, and it keeps people from acting until it is nearly too late. You do not need to clear the delinquency to sell. Delinquent taxes are a lien researched by the title company during the title search and paid directly from the sale proceeds at closing, exactly like a mortgage payoff.

The practical effect is that the equity in the house absorbs the debt. The title company requests an official payoff statement from each taxing unit, the amount is disbursed at closing, the liens are released, and you receive whatever remains. You never write a check.

That outcome is enormously better than a tax sale, where the property can go for far less than market value and the equity you spent years building can largely evaporate. Even a modest amount of equity usually makes selling the better result — and if there is no equity, we will tell you that plainly rather than waste your time.

Before you decide to sell, there is an option many Texans never hear about. Under Section 33.06 of the Texas Tax Code, a homeowner who is 65 or older or who qualifies as disabled can file for a tax deferral on their homestead. Filing generally stops collection activity and pending tax foreclosure on that homestead for as long as the person lives there and qualifies.

It is a postponement, not forgiveness. Interest continues to accrue on the deferred taxes, and the accumulated balance becomes due when the property is sold or transferred, which can mean a substantial bill landing on your heirs. But if the goal is to stay in your home and stop a foreclosure clock, it is a genuine option and it costs nothing to ask about.

Contact the appraisal district for the county your property sits in — Dallas CAD, Tarrant Appraisal District, Collin CAD, or Denton CAD — and ask about the over-65 or disabled tax deferral affidavit. We would rather you understand every option than sell under pressure. If selling still turns out to be the right move afterward, our offer will still be here.