Seniors Can Stop Paying Property Taxes in Texas

However, property taxes don’t go away; they're simply deferred and will accrue interest

By S.M. Oliva | Reviewed by Canaan Suitt, J.D. | Last updated on June 27, 2024 Featuring practical insights from contributing attorney Mary E. Wood

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Normally, if you fail to pay your property tax, your house can be seized by the government and sold at auction. But Texas actually provides special protections for elderly and disabled homeowners. If you qualify for these protections, your home is protected from seizure even if you do not pay your property tax.

While, in theory, property tax deferment may sound like something to take advantage of, tax attorneys like Mary E. Wood say there’s more to it than meets the eye. “Just because you can defer doesn’t mean it goes away,” says Wood, who works at Meadows, Collier, Reed, Cousins, Crouch & Ungerman in Dallas.

“Obviously, interest will continue to accrue while you’re deferring property taxes, and if you have a mortgage on the home, that will often violate the terms of the mortgage. The mortgage company may say you’re in default. And if the person passes away, whoever inherits that property—like your family—will be responsible for those taxes.”

So, of course, there is a catch: The tax does not simply disappear for Texas homeowners.

The Basics of Texas Property Tax Deferral

So, how does this homestead exemption work? Section 33.06 of the Texas Property Code explains the procedures for “deferred collection” of property taxes. A property owner is only qualified to seek a deferral if they are 65 years of age or older, receiving federal disability benefits as a disabled person, or a disabled veteran.

You Can Only Use Deferral for Your Residence Homestead

The deferral itself may only be used against a residence homestead—that is, a residence that the qualified individual personally owns and occupies as their home. So you cannot use a deferral against property taxes owed a rental or investment property.

With anything in tax, you take advantage of certain provisions in the income tax code or property tax code, but you have to think about what other ramifications might potentially be out there. With most tax code-related issues, you can’t look at one piece and think, ‘That’s the magic bullet!’ You have to dive in and see the issues surrounding it.

Mary E. Wood

How to Request a Property Tax Deferral

The person seeking the deferral must file an affidavit with the chief appraiser of their local appraisal district stating they are qualified for the deferral under the standards described above.

If local authorities have already filed a lawsuit to collect delinquent taxes or moved to sell the property, then the homestead owner may file the affidavit with the court to stop the proceedings. Once established, the deferral means the government cannot proceed with any property tax collection efforts.

Tax Deferral Doesn’t Erase the Tax

This property tax relief doesn’t erase the tax. A deferral is just that: A delay in when the tax becomes due. According to Section 33.06, the deferral lasts until the 181st day after a qualifying event terminates the deferral. The two most common qualifying events are:

  1. The owner sells the property;
  2. The owner dies.

In the case of death, the deferral may be extended if the owner had a surviving spouse who was at least 55 years old and continues to live in the house. Once the deferral expires, all of the previously unpaid property taxes become due–plus 8 percent interest. And there may be additional penalties and interest on any deferred taxes that are not paid within 181 days of the termination date.

The Costs of Deferring Property Taxes

Even if you qualify for a deferral and file an affidavit, it may still be in your best interests to continue paying your property tax normally. For one thing, you’ll avoid the 8 percent interest charge. For another, any deferred taxes will appear on public land records as “delinquent” taxes, which can seriously impact your credit rating. The main benefit of a tax deferral is that it prevents the assessment of penalties if you are occasionally late with a payment.

Considering Tax Deferral? Speaking with a Tax Lawyer

If you’re a qualifying homeowner who’s short on cash and thinking of deferring, consider speaking with a Texas tax attorney. They may be able to find other savings opportunities and, at the very least, can properly contextualize the downsides of property tax deferment.

“With anything in tax, you take advantage of certain provisions in the income tax code or property tax code, but you have to think about what other ramifications might potentially be out there,” Wood says. “With most tax code-related issues, you can’t look at one piece and think, ‘That’s the magic bullet!’ You have to dive in and see the issues surrounding it.”

For more information on this area of law, see our tax law overview.

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