How Do Tax Liens Work in Texas: Foreclosure, Auction, Redemption

In Texas, a property tax lien attaches automatically to every taxable property on January 1 each year to secure that year’s taxes, and if those taxes go unpaid the local taxing unit can add penalties and interest, sue to foreclose, and sell the property at a public auction. Former owners usually get a window to buy the property back afterward, but the price climbs the longer they wait. Here is how tax liens work in Texas from the moment they attach through the final chance to redeem.

When the Lien Attaches

You will not get a notice when a tax lien lands on your property. Under Texas Tax Code Section 32.01, a lien attaches to every taxable property on January 1 to secure all taxes, penalties, and interest that will be assessed for that year. The lien is perfected the instant it attaches; the taxing unit does not have to file or record anything to make it enforceable.¹ It stays on the property until every dollar of tax, penalty, and interest is paid.

The taxing unit that holds the lien is whichever local body levied the tax: a county, city, school district, or special district.

What You Owe Once Taxes Go Delinquent

Texas property taxes are generally due by January 31. On February 1 they become delinquent, and the meter starts.

The penalty begins at 6 percent of the unpaid tax for the first month and adds 1 percent for each additional month. If the tax is still unpaid on July 1, the penalty tops out at 12 percent. On top of the penalty, interest runs at 1 percent per month for as long as the balance sits unpaid.²

If the taxing unit has hired an attorney to collect, it can tack on an additional penalty equal to the attorney’s contractual compensation on taxes still unpaid July 1. That collection penalty commonly adds 15 to 20 percent to the balance. You must receive written notice of the delinquency and the extra penalty at least 30 days before July 1.²

Why the Tax Lien Beats Your Mortgage

A Texas property tax lien outranks nearly every other claim on the property. It takes priority over mortgages, deeds of trust, HOA liens, and even future interests like remainder rights, regardless of whether those claims existed before the tax lien attached.³ When the property is sold to satisfy the tax debt, the government gets paid first. Your mortgage lender, HOA, or any other lienholder collects only from what is left.

The Foreclosure Lawsuit

A taxing unit can sue to foreclose its tax lien any time after the tax becomes delinquent. The suit is filed in a court with jurisdiction in the county where the tax was imposed, and the taxing unit can combine the foreclosure with a claim of personal liability against the owner and foreclose on any other liens it holds against the property in the same case.⁴

If the court finds the taxes are owed and you got proper notice, it enters a judgment for the full amount of taxes, penalties, interest, and costs, and authorizes foreclosure. That judgment sends the property to auction.

How to Stop or Delay the Foreclosure

Texas law gives you a few ways to slow down or stop a tax foreclosure before it reaches the auction block. Which one fits depends on your situation.

Deferral for Seniors, Disabled Owners, and Disabled Veterans

If you are 65 or older, disabled, or a disabled veteran, and you own and live in the property as your homestead, you can defer collection of property taxes entirely. File an affidavit with the chief appraiser for the appraisal district stating your age or disability status and confirming the homestead.⁵

Once the affidavit is on file, no taxing unit can sue you for delinquent taxes or sell the property at a tax sale. The protection lasts as long as you own and live there. Taxes, penalties, and interest keep accumulating in the background, but no foreclosure can move forward. If you move out or sell, the taxing unit must wait at least 181 days after delivering a notice of delinquency before resuming collection.⁵

If a lawsuit or sale is already pending, you can still stop it. File the affidavit with the court where the suit is pending, or deliver it to the chief appraiser, the taxing unit’s collector, and the officer scheduled to conduct the sale, no later than five days before the sale date.

Bankruptcy

Filing for federal bankruptcy, whether Chapter 7 or Chapter 13, triggers an automatic stay that halts most collection actions, including tax lien foreclosures. The stay prohibits any act to enforce a lien against property in the bankruptcy estate.⁶ A pending tax sale becomes unenforceable the moment the petition is filed.

Chapter 13 tends to be more useful if your goal is to keep the house. It lets you catch up on delinquent property taxes through a repayment plan of up to five years while the stay keeps the taxing unit at bay. Chapter 7 stops an imminent sale but gives you no long-term mechanism to pay off the taxes, so the foreclosure process can resume once the stay lifts.

Active-Duty Military Protections

The Servicemembers Civil Relief Act caps interest on pre-service debts at 6 percent per year and lets courts stay foreclosure proceedings when military service materially affects a servicemember’s ability to pay. A foreclosure sale during active duty or within one year after is not valid unless a court has first ordered it.⁷ These protections apply to obligations that originated before active-duty service began.

The Public Auction

After the court enters a foreclosure judgment, the property goes to public sale. A sheriff or constable conducts the auction on the first Tuesday of the month, traditionally at the county courthouse, though the commissioners court may authorize online bidding instead.⁸

Before the auction, the officer calculates the total due under the judgment: taxes, penalties, interest, court costs, and the costs of the sale itself, such as advertising, auctioneer commissions, and anticipated deed recording fees. That total becomes the minimum bid. No one can buy the property for less than what is owed.⁸

If no bidder meets the minimum, the property is bid off to the taxing unit itself. If someone does meet or exceed it, the winning bidder gets a deed transferring the former owner’s interest. That deed is not the end of the story, because the former owner still has a statutory right to buy the property back.

Buying the Property Back: The Right of Redemption

Losing your property at a tax sale does not necessarily mean losing it for good. Texas gives former owners a right to redeem by paying the purchaser a set amount within a set time. The window and the cost depend on what kind of property it was.

Homestead and Agricultural Land

If the property was your residence homestead or designated for agricultural use, you have two years from the date the purchaser’s deed is recorded to redeem.

During the first year, you pay the purchaser the bid amount, plus the deed recording fee, plus any taxes, penalties, interest, and costs the purchaser paid on the property after the sale, with a 25 percent redemption premium on that combined total. In the second year, the premium doubles to 50 percent of the same combined total.⁹

“Costs” includes the purchaser’s reasonable expenses for maintaining and protecting the property, such as insurance, repairs required by local ordinances, HOA dues, and certain utility impact or standby fees.⁹

All Other Property

For property that is not a homestead or ag land, including vacant lots and commercial buildings, the redemption period is much shorter: 180 days from the date the purchaser’s deed is recorded. You pay the bid price, the deed recording fee, any taxes and costs the purchaser paid, and a 25 percent premium on the aggregate total. There is no second-year option because the entire window closes after six months.⁹

How to Pay

Deliver the full payment to the purchaser. If you cannot locate the purchaser, pay the county tax assessor-collector instead. Once the payment is complete, your title is restored and the purchaser’s tax sale deed is canceled.

Claiming Excess Proceeds

When a property sells at auction for more than the total owed in taxes, penalties, interest, and costs, the surplus does not just disappear. A former owner or other person with a claim can file a petition in the court that ordered the sale to recover the excess proceeds, and the petition must be filed within two years of the sale date.⁹ If no one files in that window, the surplus goes to the taxing units that received proceeds from the sale. If you lost your property and it sold for more than your debt, filing promptly is one of the most important steps you can take.

If the IRS Also Had a Lien

If the IRS held a federal tax lien on the property at the time of the sale, the federal government has its own separate right to redeem. The local property tax lien is senior to the federal lien, so the sale can go forward, but the IRS gets 120 days from the date of sale to buy the property back, or the period allowed under state law, whichever is longer.¹⁰ For Texas homestead property with its two-year window, the state period is longer, so the federal right effectively tracks the state timeline. For non-homestead property, the IRS period matches the 180-day state window because it exceeds the 120-day federal minimum. Buyers at tax auctions should know the IRS can exercise this right independently of the former owner.

1
State of Texas. Tax Code Chapter 32 – Tax Liens and Personal Liability
2
State of Texas. Tax Code Chapter 33 – Delinquency
3
State of Texas. Texas Tax Code Section 32.05 – Priority of Tax Liens Over Other Property Interests
4
State of Texas. Texas Tax Code Section 33.41 – Suit to Collect Delinquent Tax
5
State of Texas. Tax Code Section 33.06 – Deferred Collection of Taxes on Residence Homestead of Elderly or Disabled Person or Disabled Veteran
6
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
7
Office of the Law Revision Counsel. 50 U.S. Code 3953 – Mortgages and Trust Deeds
8
State of Texas. Texas Tax Code Section 34.01 – Sale of Property
9
State of Texas. Tax Code Chapter 34 – Tax Sales and Redemption
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Office of the Law Revision Counsel. 28 U.S. Code 2410 – Actions Affecting Property on Which United States Has Lien