I Inherited A House Or Property With Taxes Owed What Do I Do
Leaving a property to a loved one in a Last Will and Testament is a wonderful gift, but it can result in some costs and complications when property taxes are owed on that home. Here’s a quick guide to what to do when you inherit a home and the implications of property tax in Texas from property tax loan specialists.
Who Is Responsible for the Delinquent Property Taxes?
During the probate process, ownership of the inherited property is legally transferred to the property owner’s designated heir. This could be the person named in the Last Will and Testament or, if no will exists, the heir determined by Texas inheritance laws under the Texas tax code.
Once the ownership of the property is transferred, the new owner becomes responsible for all outstanding tax obligations, including the delinquent property tax bill, penalties, and any interest accrued. If the unpaid property taxes remain unresolved, the county tax assessor may initiate a tax warrant or a seizure of property, leading to a sale of the property to recover the taxes due. The tax rate and amount equal to the taxes owed will be determined based on the market value of the property and any applicable estate tax or capital gains taxes. Understanding the complete process of handling property taxes after death is crucial to avoiding penalties and protecting your inherited property.
What Are the Property Tax Penalties on an Inherited Home in Texas?
When you inherit property in Texas, you also inherit any unpaid property taxes tied to it.. A tax lien automatically attaches to the property on January 1 each year and stays in place until the balance is cleared. If the taxes aren’t paid by January 31, monthly interest, penalties, and potential legal fees begin to accumulate.
Penalties typically start at 6% in February and increase each month, often reaching more than 40% by midyear once interest and collection fees are added. The longer the taxes remain unpaid, the more costly and difficult they become to resolve.
To avoid escalating costs, it’s important to act quickly. Options like payment plans, exemptions (if eligible), or tax loans can help you resolve the balance efficiently. Staying informed and meeting deadlines will protect your investment and prevent legal complications
What Are My Options for Paying Delinquent Property Taxes?
It is important to carefully but quickly assess your options for paying these delinquent property taxes, as penalties and interest will continue to accumulate each month they go unpaid. Your options depend on what is most affordable for you and in line with your plans for the property.
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Sell the Property: Many people choose to sell the property because they don’t want or need the home, they live in another city or country, or they’d like to use the proceeds in a different way. If this is the option you choose, it’s important to list and try to sell the property as soon as possible, as part of the proceeds will have to be used to pay owed taxes, interest, and penalties. Also, it is important to remember that the local government will have a tax lien in place on that property and will, in time, start foreclosure proceedings in order to recoup the taxes owed. It is, therefore, important to speak to the local tax office in charge of the area where the property is located and get clarification on their processes.
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Rent the Property: If you would like to rent the property out as an additional form of income, it is essential that any owed property taxes are paid in full as soon as possible. Renting it out before paying these taxes will allow the penalties and interest to accumulate unchecked and allow the local tax office to eventually start foreclosure proceedings regarding the property.
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Live in the Property: For heirs who would like to use the property as their primary residence, it is also essential to pay outstanding property taxes, interest, and penalties as soon as possible. The legal obligation is on you to do so, and ignoring the property taxes will allow them to grow and empower the local tax office to begin foreclosure proceedings.
How to Pay the Owed Property Taxes on an Inherited Home
If you cannot access the funds necessary to pay these delinquent property taxes quickly, it is worth it to consider applying for a home property tax loan from a reputable and professional provider.
This will ensure that the account is settled immediately and in full, preventing additional penalties and interest from accumulating, as well as preventing property tax foreclosure proceedings against your home.
It is essential that you partner with a lender that has the financial certification, reputation, and ethics to deliver a fast, professional, and affordable home property tax loan. At American Finance & Investment Co., Inc. (AFIC), we have been providing affordable and professional property tax loans for more than 70 years. Our offering is highly competitive, with no payments for up to 60 months, a rate match guarantee, interest-only payments, and escrow protection. We are proud to hold the highest possible rating from the Better Business Bureau and deal with all our clients with the utmost professionalism and understanding.
If you are interested in finding out more about our home property tax loan services, please contact us today or fill out the form below for a free, instant loan estimate.
