The Facts
- The Office of Consumer Credit Commissioner reports that 72 licensed lenders issued 14,526 property tax loans in 2012.
- Property taxes climbed 205% statewide from 1991 to 2010 or an average of 6.3% per year. Conversely, personal income increased by only 70% or an average of 2.7% per year.
- The delinquency rate in Travis County has jumped from 5.1% in 2000 to 10.6% in 2013.
- After one year of delinquency, a property owner will have added 12% in interest, 12% in late penalties, and somewhere between 15-20% in collection fees onto their original tax bill.
- The Finance Commission reports that a tax lien transfer could cost a taxpayer significantly less than remaining in delinquency, $13,156 as compared to $16,608 over five years.
Recommendation
- Amend §32.06(a-2) of the Texas Tax Code to eliminate its two-tier treatment of Texans with mortgaged properties, specifically the requirement that these property owners wait until their taxes have become delinquent before initially a tax lien transfer.
- Make no attempt to eliminate or alter the tax lien's high priority status after it's been transferred to a third party.
- Refrain from enacting any additional barriers to tax lien lending that restricts and/or denies Texas property owners access to market-based tax relief.