The Legal Process of Texas Property Tax Foreclosure
Property taxes are assessed at state, county and local levels in order to fund public projects. Failure to pay property taxes can result in costly fines or the loss of your property through a tax sale. Some states, such as Texas, allow for taxing authorities to sell properties with delinquent taxes through an auction. This is similar to the foreclosure procedure a mortgage lender would take if the borrowers failed to repay a mortgage loan. Texas also mandates rules concerning the tax sale process.
Other People Are Reading
-
Property Taxes
-
Texas counties assess property taxes based on the appraised value of the home. In Texas, these rates are directly proportional to the value of the property. Each county uses an appraiser to determine the property values each year. The revenue generated from property taxes goes towards funding various public needs such as schools, roadways, police and emergency personnel. Property owners are responsible for paying property taxes each year when they are due.
Deliquent Taxes
-
If a homeowner fails to pay property taxes on time, the county can file a tax suit against the homeowner. This suit functions similarly to a lawsuit in which the county acts as the plaintiff. If the homeowner does not respond the lawsuit by paying the delinquent taxes, the court allows the county to sell the property through a tax sale. The proceeds of the tax sale are used to pay back the county.
-
Tax Sale
-
Each Texas county mandates when they will hold tax sales. Virtually anyone can bid on a property at a tax sale. Bidders must not owe delinquent taxes themselves, and they must have the amount of the bid in cash available. Bidding generally starts at the amount of the delinquent taxes, plus interest, penalties and legal and administrative fees. The winning bidder earns a deed to the property. Bidders should research the properties on which they plan on bidding prior to the auction.
Redemption Period
-
Texas homeowners have the right to redeem their property after a tax sale. However, the length of the redemption period varies. The homeowner redeems ownership rights by paying back the amount the winning bidder paid plus fee and interest. This method allows the bidder to earn a profit in return for the loss of the property title. Bidders should also consider this before placing a bid. If the bidder intends to enter the auction to make a profit, then this generally isn't a problem. The profit can be made by re-selling the property or on the interest earned during the redemption period. However, if a bidder is intending to purchase a home to live in at a discounted rate at a tax sale, he may lose the home if the previous owners exercise their right of redemption.
-
