You’re familiar with the situation: You work with buyers to close a property with the best outcome. You are the REALTOR(r) that your clients look to for guidance and support. You are professional, ethical, well-trained and committed to continuing education. Here’s a tip to impress your clients and allow them to take advantage of one of Texas’s best property tax benefits: the tax certificate.
The Texas Tax Code Section 31.08 allows anyone to request a statement on any delinquent taxes or penalties, interest, costs, or expenses for any parcel of real property. This information is easy to find in today’s digital age. Here’s the beauty of the tax certification: If a seller sells property with a statutory tax certificate that incorrectly indicates that there are no taxes due, or fails to include property as a result of it being omitted from an appraisal roll then any tax lien on the property will be extinguished and the buyer is freed from any liability for any omitted balances, or taxes based upon omitted property.
The title company will handle it for you. This tip is especially important for clients who do not use a title company. Some buyers feel the need to forgo title insurance to get a fast closing due to the rapid pace of the real estate market. This is especially true for cash transactions and other transactions that are not in the residential market. If taxes are owed, the buyer will be purchasing the property subject the balance. Your client also buys subject to any pending litigation to collect the debt. In such situations, the tax certificate protects your client.
Tax certificates are simple and affordable, which is perhaps the best thing. A tax collector must issue a tax certificate to any taxing unit that the collector collects. In San Antonio, for example, the Bexar County Tax Assessor-Collector collects taxes for the City of San Antonio and the local school districts and education districts. He also collects tax certificates for smaller utility and improvement areas. The tax collector would issue one tax certificate that contains all the information necessary to determine the taxing unit in which the property is located. Separate tax certificates are required if a property is located in an area where more than one tax collector collects tax for different taxing units. The cost of a certificate is $10, which is affordable for most buyers.
Unpaid taxes are not something buyers and sellers often think about, but they do exist. You can help your clients keep their eyes on the exciting part of buying a new property by using a tax certificate.