When Do You Pay Property Taxes on a New Home in Texas?

Are you a prospective homeowner who is struggling to understand property taxes in Taxes? Our simple and straightforward guide will provide the basics you need to know.

When Do You Pay Property Taxes on a New Home in Texas?

One of the responsibilities that come with being a Texas homeowner is paying property taxes. However, if you’re a new or prospective property owner, you may be unsure about lots of things, including when you need a tax certificate. It’s best to familiarize yourself with when homeowner property taxes are due, how often they have to be paid, how long you have to pay them, and whether or not there is a discount for early payment. In this article, we’ll discuss all this and more as it relates to homeowner property taxes.

But first, let’s make sure we’re on the same page about what property taxes are and why they’re necessary. A property tax is a sum you pay on real estate. In it’s simplest terms, the amount you owe annually is based on the value of your house and the land it sits on. Many people wonder why they have to pay taxes on a property they’ve already paid for. It’s because local governments need the money to fund public services and capital projects. Since Texas has no state income tax, these payments are especially important. Now, let’s look at the other things you need to know about property tax when buying a house or building one.

Are Property Taxes Paid in Advance? An Explanation

You’ll likely have to pay a minimum of three months’ worth of property taxes when you close on the purchase of the home. There are cases where homeowners are required to pay the first year of taxes or even more as part of the closing costs. However, some property owners offer to pay taxes for the full year to make the property more attractive to prospective buyers.

Why Do I Have to Pre-Pay Property Tax When Buying a House?

Your realtor or lawyer will have responsibility for finding out if there are any tax liens on the property. This will enable them to calculate how much taxes you and the seller will owe when the sale closes. The person who is selling you the property will have to pay a prorated amount for the portion of the year before the sale takes place. 

To fully understand this, you need to understand the tax cycle. Each property is appraised on January 1 and notices of the appraised value are sent out between April and May. Tax bills start to go out on October 1 and payments are due by January 31 of the following year. 

How Often Do You Pay Property Taxes in Texas?

In Texas, property taxes are due once yearly. However, you may have to make monthly payments.

Is Property Tax Paid Monthly or Yearly? The Simple Answer

Even though your tax obligation only needs to be settled once per year, your mortgage company may have you make a payment towards them every month via an escrow account. When the payment becomes due, they’ll pay the full amount on your behalf. If you had to pay the first year of taxes upfront, the sum will likely be collected as part of monthly mortgage payments going forward.

The assessment of first-year property taxes for new construction homes can be calculated based on either sale price or what is known as the cost approach. The latter is a combination of the replacement value of the house and the value of the land. This can result in a lower appraisal. Keep in mind that the appraised value of your home can change from year to year. 

How Long Do You Have to Pay Property Taxes in Texas?

Some people think property taxes on new homes end when they finish paying their mortgage. This isn’t the case. So, how long do you have to pay property taxes?  After you’ve paid off your mortgage, you will have to make the payments directly to your local government as long you own the property. Even if you pass away, the authorities will continue to assess property taxes.

Property tax payments are late as of February 1, and the tax collectors will begin charging penalty and interest. If the taxes, penalties, and interest go unpaid for a prolonged period, the property owner could be facing attorney fees, a lien or even foreclosure.

Choose CertSimple for Property Tax Certificates

You now have a better understanding of homeowner property taxes in Texas. We’ve answered common questions such as “when do you pay property taxes?”, “how often do you pay property taxes?”, and “is property tax paid monthly or yearly?”. At CertSimple, we make it easy to get property tax certificates in Texas. Our experienced team is known for gathering accurate, up-to-date information that gives buyers peace of mind. Contact us today at (800) 806-3639 to get the professional help you need.