Texas Property Taxes and Home Sales: What Houston, Dallas and San Antonio Homeowners Need to Know

Texas has no state income tax — a fact that attracts residents from across the country. But what many people don’t fully understand until they own property here is that Texas makes up for that missing revenue through property taxes that rank among the highest in the nation. For homeowners in Houston, Dallas, San Antonio, Austin, and Fort Worth, these tax bills can become a serious financial burden — and a common reason homeowners seek a fast exit.

How High Are Texas Property Taxes, Really?

The average effective property tax rate in Texas is approximately 1.8% of a home’s assessed value — more than twice the national average of roughly 0.9%. In practice, this means:

• A $200,000 home in Houston: approximately $3,600/year in property taxes
• A $300,000 home in Dallas: approximately $5,400/year
• A $400,000 home in Austin: approximately $7,200/year

These are averages — actual rates vary by county, city, school district, and other taxing entities. In some Harris County (Houston) zip codes, effective rates approach 2.5%.

What Happens When Texas Property Taxes Go Unpaid

Texas property taxes are paid in arrears — meaning the taxes for 2024 are due by January 31, 2025. If you miss that deadline:

February 1: Taxes Become Delinquent

An immediate 7% penalty is added plus 1% monthly interest begins accruing. By July 1, an additional 20% collection attorney fee is typically added, bringing total penalties to around 33–47% of the original tax bill.

After July 1: Tax Lien Can Be Sold

Texas counties can sell delinquent tax liens to private investors — companies that pay the county and then have the right to foreclose on your property if you don’t repay them plus interest and fees.

Tax Foreclosure

Unlike mortgage foreclosure in Texas (which is nonjudicial and can happen in as few as 21 days after notice), tax foreclosure requires a lawsuit — but the end result is the same: loss of the property.

How a Cash Sale Handles Texas Back Taxes

This is one of the most common questions we receive from Texas homeowners: “I owe years of back taxes. Can you still buy my house?”

Yes. Here is how it works:

When we purchase your Texas property, the title company handles all outstanding tax obligations at closing. The delinquent taxes, penalties, and any collection attorney fees are paid from the sale proceeds — not out of your pocket before closing. You receive whatever remains after the mortgage payoff (if any) and tax resolution.

We factor the estimated tax debt into our offer from the beginning. There are no surprises at the closing table.

Houston Flood Zones and Property Tax Complications

Houston homeowners face a particular double burden: some of the state’s highest property tax rates combined with flood risk that can devastate property values and make properties difficult to sell through traditional channels. Properties in FEMA flood zones can face higher insurance costs, lender reluctance, and limited buyer pools.

We buy Houston flood zone properties as-is, with full knowledge of flood history and zone designation factored into our analysis — not used as a reason to walk away.

Should You Pay Back Taxes Before Selling?

In most cases with a cash buyer, no — you should not pay back taxes before the sale. Here is why:

• The cash buyer handles tax resolution at closing anyway
• You may be giving cash to the county that could instead remain in your pocket after closing
• The offer you receive should already account for the tax obligation

The one exception: if the tax debt is so large it would eliminate all equity and leave you with nothing, a conversation with a Texas real estate attorney before accepting any offer is worthwhile.