Texas does not sell tax lien certificates. If you searched for how to buy tax lien certificates in Texas, the closest equivalent here is bidding at a county tax foreclosure sale, where you buy the property itself through a tax deed rather than a certificate that earns interest on someone else’s debt. When a Texas property owner falls behind on taxes, the taxing units sue to foreclose their lien, a court orders the property sold, and a sheriff or constable auctions it to the public. The winning bidder walks away with a deed, subject to a redemption window during which the former owner can buy the property back at a premium.
Here is how the process works from the buyer’s side, and what to check before you show up with a cashier’s check.
When and Where Texas Tax Sales Happen
In-person tax sales are held between 10:00 a.m. and 4:00 p.m. on the first Tuesday of the month at the county courthouse or another designated public location, conducted by a sheriff or constable. If the first Tuesday falls on January 1 or July 4, the sale moves to the first Wednesday.1State of Texas. Texas Tax Code Chapter 34 – Tax Sales and Redemption Not every county holds a sale every month. If nothing is scheduled, nothing happens.
Bidding uses oral outcry: the officer announces a minimum bid covering taxes, penalties, interest, and legal costs, and bidders call out higher amounts until no one raises. The officer then declares the property sold.
A growing number of Texas counties now run their sales online. The commissioners court has to formally authorize online bidding, and the rules take effect 90 days after being recorded in the county’s real property records.2State of Texas. Texas Tax Code TAX Section 34.01 Sale of Property Online auctions can open any time but have to close by 4:00 p.m. on the first Tuesday of the month.1State of Texas. Texas Tax Code Chapter 34 – Tax Sales and Redemption Galveston County, for example, runs its sales through realauction.com.3Galveston County, TX. Sheriff Sale Information
Public notice of each sale is posted at the courthouse door and published in a local newspaper at least 21 days before the auction. Those notices contain the legal description of each property and the cause number of the foreclosure judgment, which is what you use to start your research.
Registering to Bid
Before you can bid on anything, you need a written statement from the county tax assessor-collector confirming you do not owe delinquent taxes to any taxing unit in that county. This applies whether you are bidding as an individual or through a business entity, and knowingly violating the rule is a Class B misdemeanor.4Texas Comptroller of Public Accounts. Form 50-307 Request for Written Statement About Delinquent Taxes for Tax Foreclosure Sale
You request the statement using Form 50-307, which asks for your legal name, mailing address, and business entity details if you have them. Most counties charge a $10 processing fee.5Tarrant County. Delinquent Tax Sales Bring a government-issued photo ID for verification at registration.
If you are bidding for a company, expect to produce written authorization on company letterhead. Some counties make agents register separately for each buyer they represent. Deadlines vary. Dallas County, for instance, requires the certified written statement to be delivered to the sheriff’s office at least two business days before the sale.6Dallas County. Request for Written Statement Under Texas Tax Code Section 34.015 Regarding Delinquent Taxes Other counties let you register the day of. Confirm the timing with the specific county well in advance.
Researching a Property Before You Bid
Properties sell as-is. The taxing unit makes no promises about title or condition, and anything you discover after the sale is yours to deal with. A few checks are worth doing before the auction:
- Pull real property records for the parcel and look for encumbrances that could survive the foreclosure, including federal tax liens.
- Drive by the property. Assess the condition, and note whether anyone appears to be living there. Occupancy creates eviction issues after the sale.
- Confirm zoning and boundaries through the county appraisal district.
- Get a copy of the foreclosure judgment from the court clerk. It lists the adjudged value and the minimum bid, and it identifies the parties who were served.
Reviewing service in the judgment matters because someone who was not served in the original foreclosure suit keeps a door open to challenge the sale later. That is easier to catch before you bid than after.
Federal tax liens deserve their own line item in your research. Even when a federal lien is properly extinguished by the sale, the IRS keeps a separate right to redeem the property from you at the sale price for 120 days from the date of sale, or the state redemption period, whichever is longer.7Office of the Law Revision Counsel. 28 U.S. Code 2410 – Actions Affecting Property on Which United States Has Lien And if the taxing unit failed to give the IRS the required pre-sale notice, the federal lien can survive the sale and remain attached to the property.8Internal Revenue Service. 5.12.4 Judicial/Non-Judicial Foreclosures The IRS rarely uses its redemption right in practice, but catching a recorded federal lien in advance lets you decide whether the risk is worth the bid.
Paying and Getting the Deed Recorded
When the officer declares you the winner, you pay the full purchase price immediately. Most counties require cash or a cashier’s check made out to the officer or the taxing unit. If you fail to pay, the property can be re-auctioned and you may be barred from future sales. Online counties set their own payment methods and deadlines in their published rules.
The officer then prepares a deed conveying the property to you and either files it with the county clerk or delivers it for filing. Get it recorded promptly. Recording starts the clock on both the former owner’s redemption period and the deadline for anyone to challenge the sale.
Recording fees in Texas are set by state law: $26 for the first page and $4 for each additional page. Budget for administrative fees from the officer who conducted the sale as well, typically $26 to $60 depending on the county.
The Redemption Period
Winning a Texas tax sale does not give you clean, uncontested ownership on day one. The former owner has a statutory right to redeem the property by paying you back with a premium on top. The length of that right depends on what kind of property you bought:
- Homestead or agricultural property: two years from the date your deed is recorded.
- All other property, including vacant land and commercial parcels: 180 days from the date the deed is recorded.
To redeem, the former owner pays you the full amount you paid at auction plus a redemption premium. The premium is 25 percent of your purchase price if redemption happens in the first year. For homestead or agricultural property redeemed during the second year, the premium rises to 50 percent.1State of Texas. Texas Tax Code Chapter 34 – Tax Sales and Redemption The former owner also has to reimburse you for certain qualifying costs.
If nobody redeems within the applicable period, your ownership becomes absolute. Until then, treat your position as conditional.
Costs You Can Recover if the Property Is Redeemed
If the former owner redeems, you get your purchase price plus the premium, plus reimbursement for a defined list of expenses you incurred to protect and maintain the property. Recoverable categories include:
- Property insurance premiums.
- Repairs or improvements required by a local building code, a local ordinance, or an existing lease.
- Amounts paid to discharge municipal health or safety liens.
- Maintenance assessments paid to a property owners’ association under a recorded covenant.
- Impact or standby fees paid to a political subdivision under the Local Government Code or Water Code.
Voluntary improvements outside those categories generally are not recoverable.9Hunt Tax – Official Site. Bid Instructions and Rules Hold off on renovations until the redemption window closes. Until then, spend only what you need to keep the property insured and in compliance.
Struck-Off Properties
When a property gets no bid meeting the minimum, the officer “strikes off” the property to the taxing unit that requested the sale. The taxing unit takes title on behalf of itself and the other taxing units that held liens in the case.1State of Texas. Texas Tax Code Chapter 34 – Tax Sales and Redemption Those struck-off properties can be bought later, sometimes on terms the auction did not offer.
A taxing unit that holds a struck-off property can resell it publicly or privately, subject to any remaining redemption rights:
- If the taxing unit has not sold the property within six months after the redemption period ends, another taxing unit with an interest in the proceeds can request a public sale, conducted under standard civil procedure rules or online where the commissioners court has authorized it.
- On a standard private sale, the taxing unit can sell directly without consent from the other taxing units, but the price cannot fall below the lower of the property’s market value as stated in the foreclosure judgment or the total amount of the judgments against the property.
- A private sale below that floor is possible only if every taxing unit entitled to proceeds consents.
To pursue a struck-off property, contact the taxing unit, which is usually the county tax office or the delinquent tax attorney handling the account. Some counties post struck-off lists online or through the law firms that collect their delinquent taxes.
How Long Your Title Can Be Challenged
Texas gives you protection against late challenges to the sale. For most properties, a lawsuit contesting the sale has to be filed before the first anniversary of the date the deed was recorded. For property that was the owner’s homestead or qualified agricultural land when the foreclosure suit was filed, the deadline is two years after recording.10State of Texas. Texas Tax Code Section 33.54 – Limitation on Actions Relating to Property Sold for Taxes
After the deadline passes without a challenge, your title is settled against other claims. One exception: a person who was not served with notice in the original foreclosure suit, and who pays taxes on the property during the limitations period before filing suit, is not bound by that deadline. That is why confirming service in the foreclosure judgment during your pre-bid research is worth the time.