If you lose your house owing to unpaid Texas property taxes, you may reclaim it by redeeming it.
If you do not pay your property taxes on time, the amount owed becomes a lien on your house. This form of lien nearly often takes precedence over other types of liens, including mortgages. When taxes are not paid, the taxing authority will either sell the lien (and if you do not pay the past-due sum to the lien purchaser, that party may foreclose or use another way to get title to the house) or sell the property itself in a tax sale. In certain areas, however, no auction is made; instead, the taxation body enforces its lien by acquiring ownership to the residence. The taxation body is then required by state law to dispose of the property, typically by selling it. Before conducting a sale, the taxation authority in some countries utilizes a foreclosure procedure.
When you become behind on your Texas real estate taxes, the taxing authority places a lien on your house. It may then commence foreclosure proceedings by filing a complaint in court. A judgment will be entered by the court, and the property will be sold to a new owner. The sale revenues are used to pay off your tax bill. If no one bids on your land during the auction, or if no one bids enough, the county usually wins.
Under Texas law, you have the option to redeem the property both before and after the sale. However, if you do not redeem, you will permanently lose your seat.
Table of Contents
The Right to Redeem Generally, after a tax sale,
Most states allow delinquent taxpayers to “redeem” their house after a tax sale by paying the buyer the amount paid at the auction or paying the taxes owing, plus interest, penalties, and expenses. In certain places, the redemption period takes place prior to the sale. However, if you do not redeem, the purchaser will be able to get title to the house free and clear of any liens that existed prior to the sale.
During the redemption period, the homeowner usually has the right to dwell in the house. The length of the redemption period varies by state; one year to three years is normal. However, in certain places, the time limit is substantially shorter.
Redeeming Your Texas Property Before a Tax Sale
In Texas, you may “redeem” the house by paying off the past-due sums before the sale. To redeem, you must pay the whole judgment amount, including taxes, interest, penalties, and expenses. (Texas Tax Code Sections 33.43 and 33.48). The tax lien will be released and the foreclosure procedure will be halted. (Texas Tax Code, Section 33.53).
What Is the Redemption Period Following a Texas Tax Sale?
The redemption period in Texas is usually two years. This redemption period applies to residential homestead properties and agricultural land at the time the action was filed. Other sorts of properties have a redemption duration of 180 days. 34.21) (Texas Tax Code).
When the deed is recorded in the county records, the post-sale redemption period begins. 34.21) (Texas Tax Code).
How to Redeem If Someone Purchases the House During the Sale
To redeem your home from someone who bought it at the sale, you must pay the amount the purchaser bid for the property, the amount of the deed recording fee, the amount the purchaser paid for taxes, penalties, interest, and costs on the property, and the amount the purchaser paid for taxes, penalties, interest, and costs on the property. You must additionally pay a redemption price of:
If you redeem during the first year of the redemption term, you will get a 25% discount, and if you redeem during the second year of the redemption period, you will receive a 50% discount. 34.21) (Texas Tax Code).
As a result, if you wait until after the sale to redeem, you will have to pay more than if you redeemed earlier.
How to Redemption If the County Acquires the Land
If the house does not sell during the tax auction, it will be “struck-off” to the county, which means the property will be transferred to the county. The county will next make an attempt to sell the residence to a new owner.
You must pay the lower of the judgment amount or the fair market value of the property (as stipulated in the judgment) plus the deed filing fee and fees to redeem after the county receives the house at the sale but has not yet resold the property to a new owner. 34.21) (Texas Tax Code).
How to Redeem If the County Has Sold the Property
If the county acquired the house during the sale and later resold it to a new owner, you must pay the purchaser the amount paid for the property, the deed recording fee, and the amount the purchaser paid for taxes, fines, interest, and charges on the property. You will also have to pay a redemption price of:
If you redeem during the first year of the redemption term, you will get a 25% discount, and if you redeem during the second year of the redemption period, you will receive a 50% discount. 34.21) (Texas Tax Code).
How to Reduce Your Property Taxes
Even though you will most likely be granted a redemption time after a Texas tax sale, it is usually preferable to take action before your taxes become late in order to make them more inexpensive. For example, you could:
Investigate whether you qualify for a property tax abatement (for example, if you’re 65 or older or a disabled veteran, and you occupy the home as a residence homestead) (Tex. Tax Code 33.06), or challenge the assessed value of your home (if you believe it’s incorrect) to reduce the amount of taxes you must pay.