Title Tip: Due and Payable — Time To Open Those Property Tax Bills

It’s that not-so-wonderful time of year when property tax bills start hitting our mailboxes. At the time of this writing, tax statements have been mailed in Dallas, Collin, and Tarrant Counties. Bills are being posted daily from other counties and from other taxing authorities including school districts, community colleges, cities, improvement districts, etc.

To get your statement before it arrives in the mail, simply go online and search for your county’s tax assessor. If you live in Dallas County, forget Dallascad.org. Go to the county tax assessor’s site to get an actual copy of your property tax statement.

Once the taxing authorities in your area have posted your tax bill, your taxes are considered due and payable. That typically happens in early October. In a few (but not all) areas, homeowners may get a discount for paying their taxes before the end of the year. Most homeowners actually pay their property taxes in December and January. Your 2019 property tax bill is considered delinquent if not paid by January 31, 2020. Hefty penalties and interest are charged after January 31st.

The Texas Tax Code follows the same tax cycle pattern every year. January 1st is the start of a new property tax year. Tax assessments and exemptions are typically based on the status of the property and ownership as of January 1.

The taxable value of properties are determined each spring. Taxing districts notify property owners of their appraised value by either April 1 or May 1 (depending on the type of property) or “as soon thereafter as practicable.” According to the Texas Property Tax Code, if there is no change in your tax position then they don’t have to notify you.

Homeowners may protest their taxable value in the May/June/July time depending on deadlines for their area. Local taxing authorities set the tax rates in late summer. Tax rates different from your property value. The rates are based on how much money the local government, schools, etc. need and/or want. Rates can go up or down. Typically, when property values go up, the tax folks don’t need to raise the rates because their revenue will automatically go up. If property values are flat, then they may raise the rates to increase revenue.

October 1 is when tax bills are supposed to go out to property owners. Whether you get your property tax bill in the mail or not, the taxes are due.

Folks buying, selling, or refinancing their property this time of year may find that they have to pay their 2019 property tax bill at closing. Mortgage lenders want assurances that there are no unpaid taxes on the property. Title companies verify payment (or non-payment) of taxes and issue title insurance accordingly.

If the lender requires confirmation that the ‘due and payable’ taxes have been paid, then the title company will collect and pay the property taxes at closing or show proof that the taxes have already been paid. That proof must come from the tax office.

You can’t just pay the taxes and show a receipt. Title and mortgage companies rely on a third-party Tax Certificate to show the status of the property taxes owed. There must be a zero balance for taxes or the taxes will be collected at closing. No one wants to take the risk of a seller making a tax payment by check or credit card and then stopping payment on the check or disputing the credit card charge. Because the taxman always gets his money.

The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal or financial advice. Contact an attorney or accountant for any particular issue or problem.

Lydia Blair (formerly Lydia Player) was a successful Realtor for 10 years before jumping to the title side of the business in 2015. Prior to selling real estate, she bought, remodeled and sold homes (before house flipping was an expression). She’s been through the real estate closing process countless times as either a buyer, a seller, a Realtor, and an Escrow Officer. As an Escrow Officer for Allegiance Title at Preston Center, she likes solving problems and cutting through red tape. The most fun part of her job is handing people keys or a check.