Sale Type: | Redeemable Tax DeedA legal document that transfers property ownership to the government or an investor after the owner fails to pay property taxes for an extended period. (Sheriff or Constable Sale) |
Interest Penalty: | Redemption premium paid by the owner: 25% or 50% for homestead, agricultural and mineral property; up to 25% for other property |
Bid Method: | Public auction to the highest bidder, with a legal minimum bid |
2 years (homestead, agricultural, mineral) or 180 days (other property) | |
Sale Date(s): | First Tuesday of Every Month |
Statute Section(s): | Texas Tax Code Chapter 34 (§§ 34.01 and 34.21) |
Varies by county (property bid off to a taxing unit may be resold later) | |
Texas State Website: |
Texas works differently from the states that sell tax lienA legal claim or right against a property that serves as security for a debt or obligation owed by the property owner. certificates. Texas does not sell certificates. Instead, a sheriff or constable sells the property itself at a tax sale, and the former owner may have a limited time to buy it back. That is why this page is called “redemption deeds.” This guide explains how the process works, using the Texas Tax Code as the source.
How Texas Tax Sales Work
When property taxes go unpaid, the taxing units (county, school district, city and others) hold a tax lien on the property. They enforce it through a court judgment or a tax warrant, and the court or warrant then orders a sale.
Here is what to know about the sale itself:
Who sells: a sheriff or constable runs the sale.
When: sales take place on the first Tuesday of the month, between 10 a.m. and 4 p.m. (the first Wednesday if the first Tuesday falls on January 1 or July 4).
Where: at the county courthouse or another public place the county designates. A county can also authorize an online auction.
How: the property goes to the highest bidder, and the sale cannot close below a legal minimum. In general, that minimum is the lesser of the property’s market value as stated in the judgment or warrant and the total owed in taxes, penalties, interest and costs. If no bid reaches the minimum, the property is bid off to a taxing unit.
Notice: the officer must give written notice to the defendants in the case and publish notice of the sale.
What the Buyer Receives
A successful bidder receives a sheriff’s or constable’s deed. Under Texas law, the deed vests title in the buyer, subject to the former owner’s right of redemptionThe legal right of a property owner to reclaim their property after a tax sale by paying the full amount of delinquent taxes, interest, and penalties., certain recorded restrictive covenants and any valid recorded easements. The sale also extinguishes the tax liens that were included in the judgment.
Texas counties describe these sales as “as is.” The deed is issued without a warranty, and the county cannot guarantee title. Some counties also note that title insurance can be hard to get on a property bought at a tax sale.
Redemption: How Long and How Much
The former owner may be able to redeem, which means paying the buyer to get the property back. The length of that window depends on how the property was used when the case began:
Homestead, agricultural and mineral property: 2 years from the date the buyer’s deed is filed for record.
All other property: 180 days from the date the buyer’s deed is filed for record.
To redeem, the owner pays the buyer the amount the buyer bid, the deed recording fee, and the taxes, penalties, interest and costs the buyer paid on the property. The owner also pays a redemption premium on that total:
Homestead, agricultural and mineral property: 25% if the owner redeems in the first year, or 50% in the second year.
All other property: up to 25%.
For example, if the total came to $10,000 and a homestead owner redeemed in the first year, the premium would be $2,500. This is only an illustration. Real totals depend on the sale.
Allowed costs can include reasonable amounts the buyer spent to maintain and protect the property, such as insurance and association dues. If the owner cannot find the buyer, the owner can pay the county assessor-collector instead.
What This Means for Investors
The redemption premium is not guaranteed income. It is paid only if the owner redeems. If the owner does not, the buyer holds the property, with everything that comes with owning it. Properties can have hidden problems, titles can be hard to insure, and some sales draw competitive bidding.
Texas law says the right of redemption does not give the former owner the right to use or possess the property or collect rents from it. Even so, taking possession can involve legal steps, so talk with a Texas real estate attorney before you bid. All investing involves risk, and your results depend on your research and your decisions.
What Investors Should Check
Whether the property is a homestead, agricultural land or mineral interest, since that sets the redemption period
The minimum bid, and whether any taxes are due beyond it
The county’s sale rules, including registration and payment requirements
Title, liens and easements on the property
How the county handles property that is bid off to a taxing unit and resold
How Texas compares with other states on our tax lien states vs. tax deed states map
This content is for educational purposes only and is not legal, tax or financial advice. Talk with a qualified professional about your own situation.
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