Calculating Penalties and Interest for Unpaid Property Taxes

In most Texas jurisdictions, property taxes are due on January 31. In other words, they may be delinquent if they haven’t been paid in full by February 1. But what does that mean in terms of how much more you may owe? Here’s a rough guide for calculating the interest and penalties on your unpaid state property taxes.   

A 21-Day Reprieve

While your taxes are technically due on the 31^st, Texas also requires that taxing units give property taxpayers at least 21 days to pay their bills. Therefore, when determining your amount of interest and penalties, start by checking the postmark of the bill and the delinquency date on the bill itself.

As the Texas State Comptroller explained, if a tax bill was mailed after January 10, then the date of delinquency is postponed until the first day of the next month to give you at least 21 days to pay the bill. Therefore, if your bill is not mailed until January 15, it’s not delinquent until March 1.

Determining the Penalties

On the first day of delinquency, you immediately owe an additional 6% as a penalty. Then, you will owe an additional one percent in penalties for every month you’re late until July 1. On July 1, the penalty increases to 12%.

Taxing units can also hire private attorneys to serve as collection agents for these unpaid taxes. When they do so, the attorneys may charge another penalty of as much as 20% to cover their fees.

Calculating the Interest

Interest begins to accumulate from the first day of delinquency. Each month, you’ll pay an additional 1%, and there’s no maximum for interest.

Understanding the Impact

For example, paying property taxes the day after they’re delinquent will result in your paying an additional 7%.

By July, once the attorneys’ fees kick in, you may have to pay 41.6% in penalties and interest, and by December, you’ll be paying almost 48% more.

But the state is willing to work out a payment plan or other strategy to help you get current. And that’s why, if you need assistance dealing with state property taxes, don’t wait until the penalties are sky-high.

Instead, contact Manfred Law through our website or call our Houston office at (713) 547-5460.