A lesgislative report* looked at the main options available to taxpayers and compared the financial impact of four ways to deal with your overdue property taxes:
- Stay delinquent
- Credit card payments
- Payment plan with taxing unit
- Property tax loan
Let’s say Sammy Husson owed $8,000 in property taxes on his home and does not have the cash to pay. What are his options?
Sammy could choose to just not pay the taxes, which would pile up so much in fees and interest that the bill would very quickly double. This is not a good choice for him, for many reasons, least of all the end result would cost him $16,608-17,088.
If Sammy happened to have an $8,000 credit card, he could simply charge his taxes to his credit card. Assuming he made enough payments to pay it off within 5 years, the cost of putting his property taxes on the credit card would end up being between $13,339 and $17,653. Better than delinquency.
Payment plan with taxing unit
Well, truth be told, Sammy does not have an $8,000 line of credit. So he turns to his county and asks for installment plans. If he qualifies, this is an excellent option and will cost him, in the end, between $10,012 and $12,652.
Property tax loan
However, Sammy owes the property taxes on a home he inherited from his mother. It’s not the home he lives in, so it doesn’t qualify for installment plans.
So he turns to a property tax lender, which offers him a flexible payment solution over the next five years. At the end of it, the OCCC estimates he will have paid between $13,156 and $17,511.
*prepared by the Office of Consumer Credit Commisioner for the Finance Commission of Texas. See page 8.