Texas

Avoid Tax Foreclosure if Elderly or Disabled

Authored By: Texas RioGrande Legal Aid - Austin LSC Funded

Information

Foreclosures for nonpayment of property taxes require a court order. A full blown lawsuit must be filed by the government and an order entered by a court ordering the property sold by a sheriff or constable. One should try to work something out with the taxing entities especially if there are no defenses available.

One very important defense available is the right to defer payment of property taxes to the government if you are elderly or disabled. (The government is really a bunch of different "taxing entities" like the city, county, school district and other entities. One or two law firms often represent them in collections and court proceedings. Sometimes one law firm represents one group of them, while another firm represents another group.)

In order to obtain the deferral, the property must be your homestead and you must have an ownership interest in the property. There is no requirement that you be the owner of the property, that you occupy it as your homestead, or that you be elderly or disabled when the taxes are charged -- you only have to have these things when you request deferral. For example, a family might give a disabled child (receiving SSI) an undivided interest in the home, and then have that child request deferral.

A deferral does not wipe out the tax debt, it only postpones the requirement that it be paid right away so you will not lose the property to a foreclosure. Filing for a deferral stops the penalties from accruing, but not the interest. Once you are no longer elderly (ie, you pass away), or are no longer disabled, then the government can once again demand payment and institute foreclosure proceedings and sell the property at a foreclosure sale (but it cannot do so until after the expiration of 180 days).

Note: surviving spouses do not necessarily have to be elderly or disabled to avoid a foreclosure once the spouse with the deferral passes away. The surviving spouse must be at least 55 years old and had also occupied the property as the spouse's homestead when the spouse with the deferral passed away. In that circumstance the surviving spouse must also request deferral in writing.

A deferral is NOT the same thing as an exemption. Exemptions reduce the amount of taxes you have to pay and the requirements may be different. There are numerous kinds of exemptions (e.g., homestead, elderly, disabled, agricultural). A homestead exemption is available if you own the property and it is your homestead (form here). If you are elderly or disabled you are entitled to another exemption to further reduce your tax liability, but again the rules may be slightly different as compared to deferrals (these are different provisions in the law). The form for a homestead exemption is the same form that can be used to request an elderly or disabled exemption. A listing of exemptions and forms is here.

Important: even if you request a deferral, you should also request an exemption so the government does not tax you or your property too much. Also, just because you have an elderly or disabled exemption, does NOT mean you have a deferral. These are separate things, and each must be requested in writing separately.

In order to request a deferral, you must fill out a form, notarize it and file it with the county tax appraisal district in your local area. Click here to download the form. If you are requesting an elderly deferral, you should provide a copy of your driver's license or other document proving your age. If you are applying for a disability deferral, you should provide a copy of your SSI award letter. (You do not actually have to be receiving SSI payments, you only have to be entitled to receive them. So you can still apply for a deferral without getting SSI, but you should be able to demonstrate that you are disabled enough to get SSI. You might want to immediately apply to receive these payments with the Social Security Administration, and request deferral unless you are finally denied, after all appeals.)

If a lawsuit has already been filed, or if the order has been signed granting the foreclosure of the property by the sheriff or constable, you must act fast and send a copy of your deferral to many different people and call and make sure they received your form and confirm that the sheriff or constable has pulled your home from the foreclosure sale list. You should immediately get the deferral affidavit to the chief appraiser of the appraisal district, the attorneys or others representing the taxing entities that requested the order, the sheriff or constable that is to conduct the sale, and for good measure the court that has or could order the sale of the property. The law says you must get these delivered at least five days before the sale, but I would not take chances (and even if you are late, you should still file for deferral because folks are generally not interested in foreclosing on elderly or disabled homeowners). You should probably seek legal counsel to assist you with this especially if the deferral is rejected. For more information see Section 33.06 of the Texas Tax Code, click here to review it.