Can I sell my house if I owe back property taxes?
Yes, you can sell a house with unpaid property taxes, and the overdue taxes, penalties and interest are paid from the sale price at closing, the same way your mortgage is. What matters is selling before the county's tax sale, because getting the house back after one costs more, and the deadline depends on your state.
By Andy Rong
Published
This guide is general information, not legal, tax or financial advice. Laws change and every situation is different, so check yours with a professional.
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How are back taxes paid when I sell?
Unpaid property taxes are a lien on the house, and a buyer can't get clear title until they're paid. In Texas, for example, the lien attaches every January 1 and stays with the property, as the Texas Comptroller explains, and Florida makes unpaid property taxes a first lien, ahead of every other lien on the house (Fla. Stat. § 197.122).
When you sell, the title company finds the lien in its title search, asks the tax office for the payoff, and pays it at closing out of the sale price, along with your mortgage and any other liens. You get what's left. Penalties and interest can keep adding up while the taxes go unpaid, so ask your county tax office what's owed today and how that will change.
What happens if the taxes stay unpaid?
Eventually the county can sell the house, or a lien on it, to collect. How depends on your state: some counties sell the house at a tax sale, some sell a tax certificate that can later turn into a tax deed, and some file a lawsuit to foreclose the tax lien. Most of these states then give the owner a set time to pay everything back and keep the house, called the right of redemption.
Selling before the county's sale usually costs less than redeeming after it, because several states add a premium to redeem on top of the taxes, as the state notes below show.
How long do I have in my state?
A short summary of each state's tax sale and redemption rules for a home, with the law behind it. Your county's notices control your dates, and laws change, so confirm yours with the county tax office or a real estate attorney.
Texas
The taxing unit sues to foreclose its lien, and the house is sold by the sheriff or a constable. If it was your homestead, you can buy it back until the second anniversary of the buyer's deed being filed, paying the buyer a 25% premium in the first year or 50% in the second; most other property has 180 days, with a premium of up to 25% (Tex. Tax Code § 34.21).
Covent buys in Texas: Houston, Dallas, Austin, San Antonio.
Georgia
Counties sell tax-delinquent property at tax sales. The owner can redeem it within 12 months of the sale by paying the sale price, any taxes paid since and a premium of 20% for the first year and 10% for each year after; after 12 months, the buyer can end that right with a formal notice, as the DeKalb County Tax Commissioner explains.
Covent buys in Georgia: Atlanta.
Tennessee
Delinquent taxes are collected through a lawsuit and a court-approved sale. The time to redeem runs from the court's order confirming the sale and depends on how long the taxes were delinquent: one year if five years or less, 180 days if more than five but less than eight, and 90 days if eight or more, with 30 days for vacant or abandoned property (UT County Technical Assistance Service).
Florida
Counties sell tax certificates on unpaid taxes. Once two years have passed since April 1 of the year a certificate was issued, its holder can apply for a tax deed (Fla. Stat. § 197.502), and you can redeem by paying the certificate, interest and costs until the tax deed is issued (Fla. Stat. § 197.472).
Covent buys in Florida: Miami, Tampa, Orlando, Jacksonville.
Indiana
Counties sell tax-delinquent property at a tax sale. You generally have one year after the sale to redeem it, or 120 days in some cases (Ind. Code § 6-1.1-25-4).
Covent buys in Indiana: Indianapolis.
Missouri
The county collector sells land with delinquent taxes at a tax sale. The owner has an absolute right to redeem it for one year after the sale, and a narrower right after that until the buyer gets a deed (RSMo § 140.340).
Covent buys in Missouri: Kansas City, St. Louis.
Kansas
Land with unpaid taxes is bid in by the county, and the owner has two years to redeem it, or three years for a homestead (K.S.A. 79-2401a). After that, the county can sue to foreclose, and the owner can still redeem until the day of the sale (K.S.A. 79-2803).
Covent buys in Kansas: Overland Park, Olathe, Lenexa, Shawnee, Leawood, Prairie Village.
North Carolina
Counties foreclose a tax lien through a court action, like a mortgage foreclosure (N.C.G.S. § 105-374), or by a docketed judgment and a sheriff's sale (§ 105-375). In a court action, you can redeem by paying everything owed until the court confirms the sale.
Is there help with property taxes for older homeowners?
Often, yes, though it varies by state and county. In Texas, a homeowner who is 65 or older or disabled can defer the property taxes on their home by filing an affidavit with the appraisal district; the taxes stay a lien on the house and come due once you no longer own and live in it, such as when you sell (Tex. Tax Code § 33.06, Texas Comptroller). Other states and counties have their own exemptions and deferrals, so ask your county tax office what you qualify for.
What if I owe the IRS too?
A federal tax lien also has to be dealt with at closing: either the sale pays it, or the IRS discharges the lien from the house. To ask for a discharge, apply on IRS Form 14135 at least 45 days before closing, as IRS Publication 783 explains.
This is general information, not tax or legal advice. Your county tax office can tell you exactly what's owed, and a tax professional or real estate attorney can help with liens and deadlines.
Selling to Covent Homes
Covent Homes buys houses with back taxes and other liens. The title company pays them from the sale price at closing, and you're paid what's left.
No repairs or cleaning. You don't repair, paint or clean up for us. We buy the house in the condition it's in.
No showings before you sign. Nobody walks through your house before we have a signed contract, so there are no strangers in your home while you decide.
You pick the day. Choose a closing day 14 to 60 days out, and you get paid at closing.
Closing costs paid. Covent pays the closing costs, including title and escrow fees. You pay off your own mortgage or liens.
Stay 10 days free. After closing, you can stay in the house up to 10 days at no cost, so there's no rush to move.
Cash, no financing. We pay cash, with no lender and no financing contingency, so a buyer's loan can't fall through.
Questions homeowners ask
Can I sell my house if there's a tax lien on it?
Yes. The lien is paid at closing from the sale price, and the release is recorded so the buyer's title is clear.
What if the sale price won't cover the taxes and the mortgage?
Then the sale needs the lender to agree to take less than it's owed, called a short sale, because the taxes have to be paid in full for the buyer to get clear title. A housing counselor or real estate attorney can help you work out your options.
Who pays the closing costs?
Covent pays the closing costs, including title and escrow fees. You pay off your own mortgage or liens and any realtor you hired under your own agreement.
Read more about your situation
Sources
The public pages this guide's facts and figures come from.
- Texas Comptroller of Public Accounts: Paying Property Taxes
- Florida Legislature: Florida Statutes § 197.122: Lien of taxes
- Texas Legislature: Texas Tax Code, Chapter 34
- DeKalb County Tax Commissioner: Tax Sales
- University of Tennessee County Technical Assistance Service: Redemption
- Florida Legislature: Florida Statutes § 197.502: Application for obtaining tax deed
- Florida Legislature: Florida Statutes § 197.472: Redemption of tax certificates
- Indiana General Assembly: Indiana Code, Title 6, Article 1.1, Chapter 25
- Missouri Revisor of Statutes: Missouri Revised Statutes § 140.340
- Kansas Revisor of Statutes: Kansas Statutes 79-2401a: Redemption of real estate
- Kansas Revisor of Statutes: Kansas Statutes 79-2803
- North Carolina General Assembly: North Carolina General Statutes § 105-374
- North Carolina General Assembly: North Carolina General Statutes § 105-375
- Texas Legislature: Texas Tax Code, Chapter 33
- Texas Comptroller of Public Accounts: Property Tax Payment Options
- Internal Revenue Service: Publication 783: Instructions on How to Apply for a Certificate of Discharge
About the author
Andy Rong leads Covent Homes, which buys houses for cash, as-is, from homeowners in Texas, Georgia, Tennessee, Florida, Indiana, Missouri, Kansas, and North Carolina.
Andy writes these guides to answer the questions homeowners ask before they sell, in plain words, with a public source for every fact and number.
Andy isn't a lawyer, an accountant or a financial adviser. The guides give general information, and each one says when it's time to talk to one.