If you are selling a house in Midland, Odessa, or elsewhere in Texas, property taxes can affect the amount shown at closing and may need attention after the annual bill arrives. The closing statement and signed purchase agreement control how the buyer and seller handle the current year. Review those terms before you sign and ask the title company to explain any estimate or later adjustment.
How Texas property taxes work
Texas does not have a state property tax. Local taxing units set rates and collect property taxes. Bills generally begin going out in October, and payment is due by January 31 of the following year. Penalties and interest generally begin accruing on most unpaid bills on February 1.
The Texas Comptroller says a person who owned taxable property on January 1 can be sued for delinquent taxes even after the property has been sold or transferred. A tax lien also attaches to taxable property on January 1. That rule makes it important to understand the tax language in your sale agreement; the date you hand over the keys does not by itself answer who ultimately pays each share.
Read the Texas Comptroller’s guidance on paying property taxes.
What a tax proration at closing means
A proration divides a cost between the seller and buyer for the period each is responsible under the agreement. The Texas Real Estate Commission’s One to Four Family Residential Contract (Resale), for example, says current-year taxes are prorated through the closing date and that the parties adjust the proration when the current year’s tax statement is available if the final amount differs. It also addresses who pays if taxes are unpaid at or before closing.
That is an example of a standard form; your transaction may use a different agreement or different negotiated terms. Read the signed contract and settlement statement together. Ask the title company how it calculated the tax credit, what tax amount it used, whether exemptions affect the estimate, and how a later adjustment will be handled.
See the current TREC resale contract (paragraph 13 covers prorations).
What to gather before you sell in Midland or Odessa
- Your latest property tax bill or account number and any delinquency notice.
- Information about a homestead or other exemption that may affect the current year’s tax amount.
- Your mortgage statement, including whether property taxes are paid through an escrow account.
- The proposed settlement statement and the contract paragraph describing tax prorations and any follow-up adjustment.
For an appraisal account or local property information, start with the Midland Central Appraisal District or the Ector County Appraisal District. For questions about a bill, delinquent balance, or payoff, contact the tax office or title company handling your transaction and verify the correct account.
Questions to ask before closing
- Is the tax amount on the settlement statement based on a final bill or an estimate?
- Which party is responsible for paying the current-year bill after closing under this contract?
- Does the agreement require the parties to reconcile the estimate after the actual bill is available?
- Are exemptions, special assessments, or delinquent taxes included in the figures?
- If my lender collects taxes through escrow, what happens to that account after the loan is paid off?
Keep a copy of the signed agreement, settlement statement, tax records, and any post-closing adjustment. If the bill changes or a notice arrives after closing, compare it with the agreement and contact the title company or a qualified Texas real estate professional for guidance.
Considering a sale?
Property taxes are one part of your expected proceeds. When comparing a direct sale with listing, include the tax allocation along with the written price, loan payoff, closing costs, repairs, and possession terms. You can review MRE Home Buyer’s Midland information, read about Odessa, or share the basic details of a property to start a conversation. You can ask questions and review any written terms before deciding whether to move forward.
This article is general information, not legal, tax, or financial advice. Property tax amounts and sale terms vary by property and agreement. Ask the title company, local tax office, or a qualified Texas professional about your specific situation.