Can You Sell A House With Property Taxes Owed?

The good news is, yes, you can sell a house with property taxes owed. The bad news is, it may not be as easy as you hope.

There are a few things to keep in mind if you’re looking to sell a house with delinquent taxes. First of all, the amount you owe on your taxes will likely have to be paid in full before the sale can close. Secondly, depending on your state’s laws, the buyer could be held liable for the back taxes after they take possession of the home.

Selling property with delinquent taxes

If you have delinquent taxes, there are a few ways to sell your house. However, you’ll want to work with an experienced real estate attorney so they can help you understand all of your options.  

First, you can talk to the county and find out if they’re willing to set up a payment plan for the outstanding amount owed on back taxes. If that’s not an option or if you owe more than what your home is worth, then here are three other options:

Pay Owed Taxes Using Home Sale Proceeds

One way to sell a home with delinquent property taxes is to pay the amount owed using the proceeds from the sale. In this scenario, you could sell your house if you owe back taxes more than your house is worth. The buyer would then be responsible for paying the county the full amount of the real estate tax bill.

This option can be risky for the buyer, as they could be held liable for the back taxes after they take possession of the property. So, it’s important to make sure that both you and the buyer are comfortable with this arrangement.

Is It Wise To Sell Your House To Pay Off Debt?
Is It Wise To Sell Your House To Pay Off Debt?

Sell Home in a Tax Sale

Another option is to sell your home in a tax sale. In this scenario, the county will auction your home to the highest bidder in order to collect the back taxes owed.

When a home is sold in a tax sale, the buyer typically takes possession of the property immediately. So, it’s important to make sure you have a solid agreement in place with the buyer before you enter into this type of sale.

What is short sale home

The third option is to do a short sale. In this scenario, you sell your home for less than what’s owed on it and the lender agrees to forgive the difference.

This option can be helpful if you’re struggling to pay your mortgage balance and you owe more on your home than it’s worth. However, it’s important to note that doing a short sale will likely damage your credit score and may cause you to lose your home.

What is short sale home

Pay the Tax Owed in Full

If you owe money on your property taxes, the first thing you’ll need to do as the property owner is to pay property taxes in full and settle your debt obligations. Most counties will not allow a sale to close until the back taxes are paid in full. So, before you put your home on the market, make sure you have the funds available to cover that bill.

In some cases, the county may be willing to work out a payment plan with you so that you can pay off the debt over time. However, it’s important to note that most payment plans require you to stay current on your property taxes moving forward. If you fall behind on those payments, your plan will likely be canceled and you’ll still owe the taxes.

Back taxes on property

Depending on your state’s laws, the buyer of a home with delinquent taxes may be held liable for those back taxes. So, before you agree to sell your home, make sure you’re aware of your state’s regulations.

In some cases, the seller and the buyer can both be held liable for the back taxes. If that’s the case, you’ll need to come to an agreement with the buyer about who will pay those taxes.

If you’re thinking about selling a house while you owe delinquent property taxes, it’s important to consult with an experienced real estate attorney. They can help you understand your state’s laws and what you need to do in order to sell your home.

Back taxes on property

Release of lien on real property

If you’re unable to sell your home with delinquent property taxes, another option is to obtain a lien release. This means the county will release its lien on your property after you’ve paid off the amount owed in full.

In order to do this, you’ll need to pay the back taxes, plus any associated fees and penalties. You can then take that money to the county and they will issue a lien release stating that the tax debts have been repaid in full.

This option can be helpful if you want to keep your home but you don’t have the funds available to pay off the back taxes. It’s also a good option if you plan on selling your home in the future, as it will make it easier for you to do so.

Whether you’re selling a home with property taxes owed or you simply need help understanding your delinquent tax status, it’s important to work with an experienced real estate attorney. Your attorney can provide insight into the best way to sell a house with delinquent taxes and they’ll also be able to help you understand all of your options.

What is a Federal Tax Lien?

If you have delinquent property taxes, there’s a good chance that the IRS has filed a federal tax lien against your home. An IRS tax lien is statutory and nearly automatic. A federal tax lien is a legal claim the IRS files against your property in order to collect unpaid taxes.

The filing of a federal tax lien will damage your credit score and may make it difficult for you to sell your home. In some cases, the IRS may even seize your property. So, it’s important to take action as soon as possible if you’re struggling to pay your taxes.

What is a Federal Tax Lien?

How to Avoid Tax Liens

One of the best ways to avoid a tax lien is to pay your tax liability in a timely manner. However, if you’re unable to do that, there are other steps you can take.

You can try to work out a payment plan with the IRS or you can ask for an extension on your tax payment. You can also try to sell your home and use the proceeds to pay off the tax debt.

You can also apply for a subordination from the IRS, If Federal Tax Liens are the problem, the IRS may be willing to work with you to get the property sold even if you don’t pay the property tax lien in full. In some cases, the IRS may be willing to subordinate its lien to other creditors – that is, put itself behind other creditors so that they can get paid at the sale – and allow the sale to close.

If none of these options are feasible, you may want to consider doing a home sale or obtaining a lien release. Whatever you do, it’s important to act quickly as a tax lien will damage your credit score, occur additional penalties, and may also cause you to lose your home.

Companies that buy houses for cash

Delinquent taxes can make it difficult to sell your home. However, it’s not impossible. There are a few things you can do to help make the sale process go more smoothly.

First, make sure you’re working with an experienced real estate agent. Your agent will be able to list your home in the right places and they’ll also have connections with potential buyers.

Second, be prepared to negotiate. Most buyers aren’t interested in buying a home that has delinquent taxes, so you’ll likely need to offer a discount.

Companies that buy houses for cash

Finally, be willing to take a loss on the sale. Chances are, you won’t get as much for your home as you would if taxes were up to date. But, to a Real Estate Investor, this might still be a good option.

What is a Real Estate Investor?

An investor is someone who buys homes with the intention of fixing them up and selling them for a profit. They may or may not be interested in buying a home that has delinquent taxes.

If you’re unable to sell your home through a traditional sale, you may want to consider selling it to a Real Estate Investor. Investors are always looking for new deals and they may be willing to pay slightly less for a home that has delinquent taxes.

This option isn’t ideal, but it can help you get out of a difficult situation. So, if you’re struggling to sell your home with delinquent taxes, don’t give up. There are options available to you.

“I want to sell my house, where do I start?”

ASAP Cash Offer can help you by giving you a fair all-cash offer on your house within 24 hours. All that we need is for the property to be vacant and paid off, with a clear title. We can close as quickly as in seven days if needed, or we can work with you on a closing date that fits your schedule.

Are You Struggling To Get Rid Of Your House?

We buy houses and help homeowners like yourself who may not know where to turn or what options they have available to them. Can’t sell your house because you owe taxes or has tax delinquency from unpaid income taxes, federal income taxes, etc.? IRS Lien is closing on you? Do you simply want out from under the responsibility of being a landlord? Want to sell my house but Real Estate Agents charge so much closing costs? ASAP Cash Offer can most certainly help you! Just Fill up the form below, or call us at (805) 210-8586 and you will receive a fair cash offer for your home within 24 hours, with no hidden fees or closing costs!

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