Installment Agreements with Texas Tax Offices
Installment Agreements with Texas Tax Offices
Information, not legal advice. Laws change; check the current statute or rule and talk to a Texas attorney before you act.
Before a property tax lender, an investor or a tax sale ever enters the picture, the tax office itself can put an owner on a payment plan. Texas law has several. Some are a right, some are at the collector's option, and each has its own deadlines. Every property tax lender's mail must remind owners of this: "YOUR TAX OFFICE MAY OFFER DELINQUENT TAX INSTALLMENT PLANS THAT MAY BE LESS COSTLY TO YOU" (Finance Code §351.0023).
This article covers the four main plans and how each one changes a delinquent account.
1. Delinquent tax installment agreement (§33.02)
This is the main plan for taxes that are already delinquent.
Who can get one.
- Any delinquent owner, at the collector's discretion (§33.02(a)).
- An owner of a residence homestead with a homestead exemption has a right to one on request, as long as they have not had an installment agreement with that collector in the preceding 24 months (§33.02(a)).
Terms. The agreement must be in writing, with monthly payments, and may not run more than 36 months. For an exempt homestead it must run at least 12 months (§33.02(a-1)).
Penalty and interest during the plan.
- In general, penalty and interest keep accruing under §33.01 on the unpaid balance (§33.02(b)).
- For an exempt homestead, the §33.01(a) penalty stops accruing while the owner keeps paying. Interest continues. If the owner misses a payment, penalty accrues as if there had been no agreement (§33.02(b-1)).
Protection. While the owner is in good standing, the property may not be seized and sold and no suit may be filed on the taxes covered by the agreement (§33.02(d)). The protection ends if the owner misses a payment, fails to pay other taxes when due, or breaches another condition. Before suing or selling, the collector must send a notice of default to the owner and to any other owner shown on the delinquent roll (§33.02(f)).
Trade-off. Signing is an irrevocable admission of liability for the taxes, penalties and interest in the agreement (§33.02(c)), and it pauses the limitation periods for collection (§33.02(e)).
Where owners learn of it. Every annual delinquency notice must say, in capitals, that a homestead owner should contact the tax collector about a right to an installment agreement (§33.04(b)).
2. Four-payment plan for seniors, the disabled and disabled veterans (§31.031)
This plan is for current taxes, before they go delinquent. It covers:
- owners who are 65 or older or disabled and qualify for the §11.13(c) homestead exemption; and
- disabled veterans and unmarried surviving spouses who qualify under §11.132 or §11.22 (§31.031(a)).
The owner pays the homestead taxes in four equal installments with no penalty or interest if the first payment is made before the delinquency date with a notice that the rest will come in three installments. With a February 1 delinquency date, the later payments are due before April 1, June 1 and August 1 (§31.031(a-1)). The first installment and notice can also be made before the first day of the month after delinquency (§31.031(a-2)).
A missed installment becomes delinquent and incurs a 6% penalty plus interest; the normal escalating penalty does not apply (§31.031(b)).
3. Disaster installments (§31.032)
After a declared disaster or emergency, owners of damaged property can use the same four-installment schedule for taxes imposed before the first anniversary of the event. It covers homesteads, residential property with fewer than five units, and qualifying small businesses (§31.032(a)-(c)). A missed installment draws a 6% penalty and interest (§31.032(c)).
4. Split payment (§31.03)
A taxing unit that collects its own taxes may adopt a split-payment option: pay half before December 1 and the other half before July 1 of the next year with no penalty or interest (§31.03(a)). If the second half is late, it incurs a flat 12% penalty (§33.01(b)). Not every tax office offers this; check the local office.
Plans that look similar but are not installment plans
- Deferral (§33.06). Owners 65+, disabled, or disabled veterans can stop collection on their homestead entirely; interest runs at 5%. See The over-65 and disabled tax deferral.
- Appreciation deferral (§33.065). Defers the tax on homestead value growth above 105% a year, at 8% interest.
- Escrow accounts (§31.072). A collector may let an owner prepay monthly into an escrow account for next year's taxes. Collectors must offer this to certain disabled veterans and decorated service members, and to manufactured-home owners for their homes (§31.072(h)-(i)).
Comparison table
| Plan | Taxes covered | Who | Right or option | Penalty during plan | Interest |
|---|---|---|---|---|---|
| §33.02 agreement | Delinquent | Anyone; homestead owners by right | Homestead: right (once per 24 months) | Stops for exempt homestead; otherwise accrues | Accrues (1%/month) |
| §31.031 four payments | Current | 65+, disabled, disabled vets (homestead) | Right | None if on time; 6% if missed | None if on time |
| §31.032 disaster | Current (within a year of disaster) | Damaged qualifying property | Right | None if on time; 6% if missed | None if on time |
| §31.03 split | Current | Everyone, if unit adopts | Unit's option | None if on time; 12% on late 2nd half | None if on time |
What this means for data users
- For lenders: an owner in good standing on a §33.02 agreement cannot be sued on those taxes, and the plan may cost less than a loan. The law requires you to say so on page one of your mail.
- For investors: an account with years owed but no suit may be on an installment plan. A default notice under §33.02(f) is often the step before a suit.
- For everyone: published delinquent rolls do not always show whether an account is on a plan. Ask the tax office, or watch for payments shrinking the balance.
How this shows up in Agentix Data
Our delinquent tax rolls for Dallas, Tarrant, Collin, Denton, Travis and Hood counties are loaded whenever the county posts a new file (we check every morning), and each account keeps the date we first and last saw it. A falling balance or an account dropping off the roll shows up in the next change file. We do not have a reliable payment-plan flag for every county, so confirm plan status with the tax office.
Sources
- Texas Tax Code §33.02 (installment agreements), §33.01 (penalties and interest), §33.04 (notice of delinquency): https://statutes.capitol.texas.gov/Docs/TX/htm/TX.33.htm and https://texas.public.law/statutes/tex._tax_code_section_33.02
- Texas Tax Code §31.031 (installments for elderly, disabled, disabled veterans), §31.032 (disaster installments), §31.03 (split payment), §31.072 (escrow accounts): https://statutes.capitol.texas.gov/Docs/TX/htm/TX.31.htm and https://texas.public.law/statutes/tex._tax_code_section_31.031
- Texas Finance Code §351.0023 (lender notice about installment plans): https://statutes.capitol.texas.gov/Docs/FI/htm/FI.351.htm#351.0023
- Texas Comptroller, 2025 penalty and interest chart: https://comptroller.texas.gov/taxes/property-tax/penalty-interest/chart2025-26.php
General information, not legal or financial advice.