Are Taxes owed on a Rental Foreclosure in Texas?


Are Taxes owed on a Rental Foreclosure in Texas?

Taxes on Foreclosures in Texas

With the current financial constraints, there are many issues surrounding homes and individuals who borrow loans from financial institutions. When you have borrowed a loan, you agree to the terms of payment and you place securities to be attached to your commitment to pay. In the event that you default from your legal and financial obligation to pay for the loan as agreed on terms of payments, you are deemed for a legal process called Foreclosure. Foreclosure is a process acknowledged by the law where lenders are given the right to recover their money by selling off the assets that was attached to the money borrowed as collateral.

Foreclosures may be judicial or in some other areas it can be non-judicial. In Texas for instance, most of the foreclosures are non-judicial. However, there several stringent procedure that are required by law including notices and provision of evidence proving the defaulting borrower has failed to honor payment obligation. In addition, all the document required to show the agreement and the commitment statements must be resented and well scrutinized. In Texas, this process is very serious and it has been given a specific time to and date. Foreclosure hearings are slotted to be heard on every first Tuesday of every month.

Prudence demands due diligence when seeking to purchase a house under foreclosure because you need to be aware of the taxes abound and who is responsible for such payments. While the prices may be very attractive due to the low costs, there is always a catch. Important to note is the fact that foreclosures may help you with the mortgage debt but that’s the least of your worries. There are other financial aspect that remain. This can be tragic if you went ahead to purchase a home on foreclosure without conducting due diligence on the tax history thereof.

The local government reserves the rights to remittances in terms of taxes to the house regardless of the changes in ownership. In this case, the local government will still demand the tax payments on the mortgage backdating from the time the owner stopped making payments to the current time. The payment of these taxes will depend on where the case is at that particular. If the case is still in court, the cost is still on the current owner’s bill. If the house has already been sold off to the new owner, then the cost will be transferred to the new owner. This is why it is important to be careful before the purchase.

In Texas, taxes are owed on a rental foreclosure so you better be alert and careful when buying a home. The most important point to remember is the fact that taxes do not stick or remain on the owner of the house rather they stick to the house itself. This means that when the house changes ownership. The taxes will not go with the previous owner. The current incoming new owner will be the one to bare the cost of taxes attached to the house.