Get the full picture with Tax Certificates

The Basic Tax Certificate includes:

• One page summary of general tax information for the current year
• Supporting documentation from the Property Appraiser or Tax Assessor when made available 

A Basic Tax Certificate is typically ordered when refinancing a home loan. 

The Full Tax Certificate includes:

• All taxing authorities and jurisdictions governing the property
• Tax rates
• How much in taxes are due, if any
• Payment Schedule
• Delinquent amounts owed and any related fees (i.e. Tax Suits)
• If the current owner has any exemptions applied to the property 
• An estimation of the taxes without exemptions 
• The current valuation of the property
• Judgment stage of a delinquent accounts and/or final judgment (i.e. settlement, bankruptcy, foreclosure, or tax sale)
• Payoff letters/amounts for delinquent accounts or Tax Suits
• Additional research notes when applicable

The Full Tax Certificate with Homeowners Association Information includes everything from the Full Tax Certificate as well as:

• Contact and general information on any governing private community associations 
• Additional assessments are obtained if there is no cost
• Any fees for additional HOA information is notated on the report 

Either the Full Tax Certificate or the Full Tax Certificate with HOA information are obtained for purchase transactions. Tax Certificates with Homeowners Association Information are only available in Texas.

PropLogix is trusted by some of the largest and most respected title underwriters and title companies in the nation. Close with confidence, control costs per file, maintain employee counts, save time, and optimize your internal title production by utilizing our team of specialized tax experts. 

What is the difference between a Tax Certificate and a Tax Deed Certificate?

A Tax Certificate is a type of property tax report and should not be confused with a Tax Deed Certificate. A Tax Deed Certificate is what is issued to the highest bidder at a tax sale or tax deed sale that is a result of chronic delinquent taxes.  

What Happens If You Don’t Pay Your Property Taxes?

Local governments rely heavily on property taxes to fund public services, so when homeowners don’t pay, the municipality will take action to recoup the money. All states have laws that allow the local government to sell a home through a tax sale process. 

A local government has few different approaches to settle delinquent taxes:

1. A lawsuit or Tax Suit is filed against the property owner, which may result in a settlement to repay the delinquent taxes via an installment plan, bankruptcy, foreclosure, or a tax sale. 
2. The tax lien is sold at auction as a tax lien certificate. The bidder buys the right to collect the tax debt with interest, not the house. 
3. The title to the house is sold at auction with all other liens against the property attached.
4. If you have a delinquent amount that meets a certain threshold on a homesteaded property, the tax collector will issue the certificate to the county instead of conducting a public auction.
5. The County’s Tax Collector may ask the local court to schedule a judicial sale, which wipes out any taxes, liens, or mortgages attached to the property.

A tax sale is usually the final step and last resort to settle the debt after working with the homeowner for some time. 

Tax Sale Redemption 

Even after a tax lien sale of a property, there is a chance to buy back the deed of the property with a process called “redeeming” the property. Typically, the redemption process involves paying:

• The bid amount paid by the investor 
• Any fees incurred for recording the new deed
• Any liens remaining on the property after the sale 
• Other fees, costs, and interest (rates can go as high as 18% on the debt) 
• A redemption premium 

Each state has different processes and deadlines for redemption, so you’ll want to be sure to check with your county tax collector’s office for more details. In some cases, the investor may initiate a foreclosure in as little as six months after the tax lien sale, and the added fees and interest can make paying off the debt after the sale nearly impossible. 

What homebuyers need to know about property taxes

Owning a home comes with a lot of responsibilities and additional costs that might not be obvious at first. While no one enjoys paying taxes, simply refusing to pay them will result in hefty fees and even potentially losing your home. Before purchasing a home, make sure you do the following:

• Avoid unexpected property taxes by reviewing documentation, like land surveys, tax reports, and deeds, provided by real estate professionals. If you have questions, reach out to your real estate agent or attorney for clarification.
• Understand what exemptions may apply to you and your property, like Homestead, Disabled Veteran, and/or Over 65 Exemption. Be sure to fill out the correct forms to ensure the exemption is applied.
• Depending on the timing of the sale, you may have to pay a higher or lower tax amount until your exemptions are applied.
• Exemptions do not transfer during a sale. For instance, if a young civilian family purchases a home from a seller with a Disabled Veteran and/or Over 65 Exemption, the new owners would not qualify for those exemptions.
• Determine if certain items or labor used for improvements qualify for a tax deduction. 
• Research tax credits that are available to homeowners in your area. 
• Reduce your tax burden further by protesting your property’s assessed value.  

Get more information on saving money with these tax tips for homeowners.