Tax Foreclosure in Texas: What Homeowners Need to Know
Published by AuctionBlock.org — a mission-driven company dedicated to foreclosure prevention education
If you own a home in Texas and have fallen behind on your property taxes, you are not alone. Medical bills, job loss, divorce, or disability can make it impossible to keep up with payments. But in Texas, the consequences of unpaid property taxes can escalate quickly. Understanding how the process works — and what rights you have — is the first step toward protecting your home.
This guide explains the Texas property tax foreclosure process using plain language and cites real Texas statutes so you can verify everything yourself.
How Property Taxes Work in Texas
Texas has no state income tax, which means local governments rely heavily on property taxes to fund schools, roads, and public services. Property taxes are assessed annually by your county appraisal district and collected by the county tax assessor-collector.
Under Texas Tax Code Section 31.02, property taxes are due on receipt of the tax bill and become delinquent on February 1 of the following year. For example, taxes assessed for 2025 become delinquent on February 1, 2026.
Once delinquent, penalties and interest begin to accrue:
- Penalty: 6% in February, increasing by 1% per month through June, reaching 12% by July 1 (Tax Code Section 33.01)
- Interest: 1% per month starting February 1
- Additional penalty: After July 1, an additional 20% collection penalty may be imposed if the account is referred to a delinquent tax attorney (Tax Code Section 33.07)
How Tax Foreclosure Works in Texas
Texas is a tax lien state. When you fail to pay property taxes, the taxing unit (county, city, school district) has an automatic lien on your property under Tax Code Section 32.01. This lien is superior to almost all other liens, including your mortgage.
The taxing unit can file a lawsuit to foreclose on this lien. Under Tax Code Section 33.41, the taxing unit may file suit at any time after the taxes become delinquent. There is no minimum waiting period before a suit can be filed, though in practice most counties wait one to two years before pursuing litigation.
Here is the general process:
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Delinquency notice. The county sends notice that your taxes are past due and that penalties and interest are accruing.
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Lawsuit filed. The taxing unit files a suit in district court seeking a judgment for the delinquent taxes, penalties, interest, and attorney fees (Tax Code Section 33.41).
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Court judgment. If the court rules against the property owner, it issues a judgment and orders the property sold at public auction.
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Tax sale. The property is sold at a public auction held on the first Tuesday of the month at the county courthouse (Tax Code Section 34.01). The minimum bid is the amount of the judgment — all delinquent taxes, penalties, interest, and costs.
Redemption Period: Your Right to Buy Back Your Property
Texas law provides a right of redemption after a tax sale, but the timeline depends on the type of property:
- Homestead or agricultural property: You have 2 years from the date the deed is filed to redeem the property (Tax Code Section 34.21(a)).
- All other property: You have 180 days from the date the deed is filed (Tax Code Section 34.21(e)).
To redeem, you must pay the purchaser the amount they paid at auction, plus a 25% premium if you redeem within the first year, or a 50% premium if you redeem during the second year (Tax Code Section 34.21(a)).
This redemption right is critical. Even after a tax sale, you may still be able to reclaim your home — but the cost increases the longer you wait.
Real Programs Available to Texas Homeowners
Property Tax Exemptions
Texas offers several exemptions that can significantly reduce your tax bill:
- Homestead exemption: Under Tax Code Section 11.13, all homeowners are entitled to a $100,000 exemption from school district taxes on their primary residence. You must apply through your county appraisal district.
- Over-65 exemption: Homeowners 65 and older receive an additional $10,000 school district exemption and may qualify for a tax ceiling that freezes school taxes at the amount due the year they turned 65 (Tax Code Section 11.26).
- Disabled person exemption: Similar to the over-65 exemption, available to persons meeting Social Security disability criteria (Tax Code Section 11.13(c)).
- Disabled veteran exemption: Veterans with a VA disability rating may qualify for partial or total exemption depending on the percentage of disability (Tax Code Section 11.22).
Tax Deferral for Seniors and Disabled Homeowners
Under Tax Code Section 33.06, homeowners who are 65 or older or disabled can file an affidavit with their county to defer (postpone) paying property taxes on their homestead. While the deferral is in effect:
- No lawsuit can be filed to collect delinquent taxes
- No tax sale can occur
- Interest continues to accrue at 5% per year
This is one of the most powerful protections available in Texas. If you qualify, filing this affidavit can immediately stop a pending tax foreclosure.
Payment Plans
Under Tax Code Section 33.02, if you owe delinquent taxes, you can enter into an installment agreement with your county tax office. Payments can be spread over a period of 12 to 36 months, depending on the amount owed. While you are current on your payment plan, the taxing unit cannot file a foreclosure lawsuit.
Homeowner Assistance Fund (HAF)
The Texas Homeowner Assistance Fund, administered by the Texas Department of Housing and Community Affairs (TDHCA), provides financial assistance to eligible homeowners who have experienced pandemic-related financial hardship. HAF funds can be used to pay delinquent property taxes. You can apply through the TDHCA website or by calling 1-833-651-3874.
Legal Aid and Counseling Resources
If you are facing tax foreclosure in Texas, the following organizations offer free or low-cost legal assistance and housing counseling:
- Texas RioGrande Legal Aid (TRLA): Provides free legal services to low-income Texans. Call 1-888-988-9996 or visit trla.org.
- Lone Star Legal Aid: Serves 72 counties in East and Southeast Texas. Call 1-800-733-8394 or visit lonestarlegal.org.
- Legal Aid of NorthWest Texas: Serves the Dallas-Fort Worth area and Northwest Texas. Call 1-888-529-5277 or visit lanwt.org.
- Texas HUD-Approved Housing Counseling Agencies: HUD maintains a list of approved counseling agencies at hud.gov/counseling. You can also call HUD's housing counseling hotline at 1-800-569-4287.
What to Do RIGHT NOW If You Are Behind on Property Taxes
- Contact your county tax office. Ask about installment payment plans under Tax Code Section 33.02. Many counties will work with you.
- Apply for every exemption you qualify for. The homestead exemption alone can save you thousands.
- If you are 65+ or disabled, file a tax deferral affidavit immediately. This stops foreclosure proceedings.
- Contact a HUD-approved housing counselor. Free counseling is available at 1-800-569-4287.
- Apply for HAF assistance through TDHCA if you experienced pandemic-related hardship.
- Consult with a legal aid attorney if you have been served with a lawsuit.
- Do not ignore notices from the county. Every day you wait reduces your options.
AuctionBlock.org is here to help. Visit auctionblock.org/get-help for free resources, guides, and referrals to local assistance programs. We are a mission-driven company — we never charge for our services.
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Laws and programs change over time. Always verify current rules with your county tax office or a licensed attorney. AuctionBlock.org is a mission-driven company organization providing foreclosure prevention education and awareness.