Texas Property Tax Loan vs County Payment Plan vs Deferral
Four real options when you can't pay Texas property tax on time. Plain-English costs, with worked examples on a $5,000 bill.
The four options at a glance
| Option | Cost on a $5,000 bill (1 yr) | Eligibility | Best for |
|---|---|---|---|
| Pay the county directly within Feb-Mar | $5,350-5,450 (7-9% penalty + interest) | Anyone | Borrowers with cash or short-term liquidity |
| County-installment plan (§33.02) | $5,200-5,800 (varies by county and entry date) | Eligible delinquent taxpayers — terms set by county | Borrowers who can pay over 12-36 months and want to deal directly with the county |
| Property tax loan (Chapter 351) | $5,250-5,500 (Y1 finance charge at 14% APR / 60-month term) | Texas property owners with tax owed; no credit check | Borrowers who need 5-10 year terms or cannot get other credit |
| §33.06 senior/disabled deferral | $5,250 first year (5% statutory interest, no fees) | Homeowners 65+ or with qualifying disability | Almost always the cheapest option for those who qualify |
| Do nothing (full Y1 delinquency) | $7,350 (47% penalty + interest + attorney fee) | — | — |
1. Pay the county directly
Texas Tax Code §33 layers penalties starting February 1: 6% penalty + 1% interest in February, climbing 1 percentage point per month thereafter, plus an attorney collection fee of up to 20% added on July 1. If you pay before April you're in the 9-13% range; if you wait until July you face roughly 41-47%.
Bottom line: if you can pay within the first 60 days, paying the county directly is the cheapest option for everyone except seniors/disabled (who have the deferral). Beyond July it becomes the most expensive option fast.
2. County-installment plan (Texas Tax Code §33.02)
Texas Tax Code §33.02 allows certain delinquent taxpayers to enter into an installment agreement with the county tax office. Terms vary widely by county and by the type of property (homestead vs. non-homestead), but most are 12-36 months with the existing penalty + interest already accrued at the start. Some counties freeze further penalties when the agreement is signed; others continue to add 1% per month interest.
Bottom line: good for borrowers who entered delinquency recently and can pay over 1-3 years. Phone your county tax assessor-collector to ask if §33.02 is available for your bill — eligibility and terms are not standardised statewide.
3. Property tax loan (Texas Finance Code Chapter 351)
A licensed property tax lender pays the county for you, halting the §33 penalty schedule, and you repay them at a fixed APR (typically 8-25%) over 12-120 months. No credit check at the quote stage. The trade-off is that you're paying market interest over a longer period — but the predictability and the longer term often make this cheaper than letting the §33 penalty compound.
Bottom line: best for borrowers who need 4+ years to repay, or who don't qualify for §33.06 deferral. Get a free quote →
4. §33.06 senior/disabled deferral — the cheapest option
Texas Tax Code §33.06 allows homeowners aged 65+ or with a qualifying disability to defer all property taxes on their homestead through the county tax office. The deferral postpones collection until the property is sold or transferred, with statutory interest at 5% per year — no closing costs, no application fees, no credit check. Most licensed Texas property tax lenders will themselves point applicants to this option first if they qualify.
To enter a §33.06 deferral, contact your county tax assessor-collector directly and ask for the deferral affidavit. There is usually a one-page form.
Bottom line: if you qualify, almost always the cheapest option. Always check this before considering a private property tax loan.
Worked example: $5,000 Harris County tax bill, paid 1 year late
Assume the bill was due February 1 and you cannot pay by then. The cost picture by July 1:
- Do nothing — $5,000 × 1.47 = $7,350 by July 1, then +1% per month indefinitely.
- Property tax loan at 14% APR / 60 months — monthly payment ~$116, total finance charge over 5 years ~$1,975. Y1 cost ≈ $5,000 + ~$700 interest = $5,700.
- County §33.02 installment plan at 24 months (typical) — depends on penalty already accrued at signing. If signed in March, total roughly $5,200-5,800 over 24 months.
- §33.06 deferral (if 65+ or disabled) — 5% × $5,000 = $250 first-year statutory interest. Total $5,250. No further penalty.