Rob Hartley
Founder, AppealDesk · February 16, 2026
What Happens If You Don’t Pay Property Taxes?
Updated February 2026 · 9 min read
You can lose your home. Unpaid property taxes trigger penalties (1-1.5%/month), interest (6-18%/year), a tax lien, and eventually a tax sale. The timeline varies by state — as little as 2 years in Texas, 3-4 in New York — but every state can sell your property for unpaid taxes, even if your mortgage is paid off.
The Unpaid Property Tax Timeline
Day 1-30: Late penalty. Most counties add 1-1.5% immediately. Texas charges 6% on Feb 1 plus 1%/month through June. Some add flat fees ($25-100).
Month 2-12: Interest accrues. 8-18% annually — far higher than consumer debt. Florida charges 18%/year. Texas adds 12%/year after July 1.
Year 1-3: Tax lien filed. The county places a legal claim on your property. In ~30 states, the lien may be sold to an investor who earns interest until you repay.
Year 2-6: Tax sale or foreclosure. The county sells your property at auction. In ~20 tax-deed states, the property itself is sold. In lien states, failure to redeem within 1-3 years means the lien holder can foreclose.
How Fast Unpaid Taxes Grow
| Time Past Due | Penalties | Interest | Total (on $5,000 bill) |
|---|---|---|---|
| 1 month | $300 (6%) | $0 | $5,300 |
| 6 months | $550 | $0 | $5,550 |
| 1 year | $600 | $600 | $6,200 |
| 3 years | $600 | $2,160+ | $7,760+ |
A $5,000 bill becomes nearly $8,000 in three years — a 55% increase — before the property is sold. This doesn’t include attorney fees or collection costs.
Tax Lien vs. Tax Deed: How Your State Works
Tax Lien Sale (~30 States)
County sells the debt. An investor pays your taxes and earns 8-36% interest. If you don’t repay within 1-3 years, they can foreclose.
States: FL, IL, IN, NJ, AZ, MD, and ~25 others
Tax Deed Sale (~20 States)
County sells the property itself at auction. Wipes out the owner’s interest. Some states offer post-sale redemption; many don’t.
States: TX, CA, GA, NY, PA, OH, and ~15 others
What If You Have a Mortgage?
- Escrow: Most mortgages collect taxes monthly and pay for you. If your lender underpays, they’re responsible for penalties.
- Force-payment: Without escrow, your lender can pay delinquent taxes and add the amount to your balance.
- Mortgage default: Not paying property taxes is typically a mortgage default — the lender can foreclose even if payments are current.
Lower Your Tax Bill Before It Becomes a Problem
Enter your address to see if you're overassessed. A successful appeal saves hundreds to thousands per year.
What to Do If You’re Behind
- Request a payment plan. Most counties offer installment agreements. Contact your county treasurer.
- Apply for missing exemptions. Homestead, senior, veteran, disability — some allow retroactive application.
- Appeal your assessment. A successful appeal reduces future bills. Filing is free; evidence packets start at $49.
- Tax deferral programs. Many states defer taxes for seniors, disabled, and low-income homeowners until the home is sold.
- HUD housing counselors. Free advice at hud.gov/counseling or 1-800-569-4287.
The Best Long-Term Solution: Reduce Your Bill
A property tax appeal permanently reduces your assessed value, lowering your bill for years. Use AppealDesk’s free lookup to check if you’re overassessed, then file with professional evidence for $49. Also review lowering taxes without an appeal for additional strategies.