Can You Sell a House With Property Tax Debt in Texas?
Falling behind on property taxes is more common than most people think, especially in Texas, where rising appraisals and unexpected life events can make tax bills difficult to manage. If you owe back property taxes, you may be wondering:
Can I still sell my house if I have property tax debt?
The short answer is yes. Texas homeowners can sell a property with unpaid taxes, and in many cases, selling is the cleanest way to resolve the debt and avoid tax foreclosure. This guide explains how the process works, what happens to the tax debt, and what options you have depending on your situation.
Yes You Can Sell a House With Property Tax Debt in Texas
Unpaid property taxes do not prevent a sale.
In Texas:
Property tax debt attaches to the property, not you personally
The home can still be sold
Taxes are paid at closing using the sale proceeds
As long as the sale price covers the outstanding taxes (plus penalties and fees), the transaction can move forward normally.
What Happens to Property Tax Debt When You Sell?
At closing, the title company will:
Calculate the total amount owed (taxes, penalties, interest, attorney fees)
Pay the taxing authorities directly
Clear the tax lien from the title
Distribute any remaining proceeds to you
You do not need to pay the tax debt out of pocket before selling.
What If the Taxes Are in Collections or a Lawsuit?
Even if your taxes have been turned over to a collections attorney—or a tax lawsuit has already been filed—you can still sell.
In these situations:
Attorney fees (often up to 20%) are added
The payoff amount increases
The title company coordinates directly with the attorney
As long as the sale closes before a tax foreclosure auction, selling stops the process entirely.
Can Selling Stop a Tax Foreclosure in Texas?
Yes. Texas allows homeowners to sell their property any time before the tax foreclosure sale occurs.
Selling before the auction:
Pays off the tax debt
Stops foreclosure proceedings
Prevents loss of equity
Avoids long-term credit consequences
Once the property is sold at auction, ownership is transferred and recovery options become limited—so timing matters.
Do I Need to Make Repairs or Clean the House First?
No. Many homeowners behind on taxes cannot afford repairs or cleaning, and that’s not required to sell. You can sell your home:
As-is
With repairs needed
With clutter or belongings left behind
Without inspections or showings
Cash buyers and investor buyers routinely purchase tax-delinquent properties in any condition.
What If the Tax Debt Is More Than the Home’s Value?
This is one of the most important situations to evaluate.
If:
The tax debt + mortgage + liens exceed the home’s value
Then:
A traditional sale may not work
A negotiated payoff or legal guidance may be needed
Acting early is critical
In many cases, however, homeowners are surprised to learn they still have equity, even with significant tax debt.
Common Mistakes Homeowners Make With Property Tax Debt
Avoid these costly missteps:
Ignoring tax notices
Waiting until a lawsuit is filed
Assuming the house can’t be sold
Entering unaffordable payment plans
Letting penalties and attorney fees grow
Not understanding true equity
The earlier you explore your options, the more flexibility you have.
How Pena Real Estate Helps Homeowners With Tax Debt
Pena Real Estate helps Texas homeowners:
✔ Evaluate total tax debt
✔ Understand foreclosure timelines
✔ Compare payment plans vs selling
✔ Sell homes as-is
✔ Coordinate with title companies and attorneys
✔ Stop tax foreclosure before auction
✔ Protect as much equity as possible
You’ll get clear numbers and honest guidance, no pressure.
If you owe property taxes and want to understand whether selling makes sense, send me the address and I’ll prepare a no-pressure breakdown showing your options and potential outcomes.
