Yes, you can sell your house even if you owe property taxes. Many homeowners face financial difficulties that lead to unpaid taxes, but you still have options. Whether you are behind on taxes by a few months or several years, selling your home can help you settle the debt and move forward.
Understanding your rights, the selling process, and how unpaid property taxes affect a home sale is essential. This guide explains what happens when you sell a home with unpaid taxes and how you can still close a deal successfully.
What Happens If You Owe Property Taxes?
When property taxes go unpaid, the local government places a tax lien on your home. A tax lien is a legal claim that must be resolved before the property can be transferred to a new owner.
If taxes remain unpaid for too long, the government may sell the tax lien to an investor or even foreclose on the home. However, before reaching that point, homeowners have the chance to sell and pay off the tax debt.
Can You Sell a House With Unpaid Property Taxes?
Yes, you can sell your house even if you owe property taxes, but the debt must be paid at closing. Here’s how it works:
- The buyer or title company ensures the tax debt is paid before completing the sale.
- The amount you owe is deducted from your home sale proceeds at closing.
- If your home’s value is higher than your debt, the remaining balance goes to you.
Even if you are in pre-foreclosure due to unpaid taxes, you still have time to sell your house in foreclosure before losing the property.
Options for Selling a House With Property Tax Debt
If you need to sell but still owe taxes, you have several options:
1. Pay Off the Taxes Before Selling
If you have the funds, the easiest way to sell your home is to pay off the taxes in advance. This clears the lien and allows for a smooth closing. Some ways to cover the cost include:
- Using savings or a short-term loan
- Requesting a payment plan from your local tax authority
- Applying for tax relief programs in your state
2. Sell to a Cash Buyer
If you want a fast sale, cash buyers purchase homes as-is, even with tax liens. The buyer pays off the tax debt at closing, so you don’t need to handle it yourself.
Benefits of selling to a cash buyer:
- No repairs or upgrades needed
- Faster closing
- No real estate commissions or hidden fees
- No waiting for mortgage approvals
3. List Your Home on the Market
You can still sell your home with a real estate agent, but the tax lien must be paid at closing. This option works best if:
- You have time to wait for a buyer
- Your home is in good condition
- You’re prepared for closing costs and agent fees
4. Negotiate With the Tax Authority
In some cases, you may be able to negotiate a lower tax debt before selling. Many tax offices offer:
- Partial payment settlements
- Reduced penalties or interest fees
- Payment plans that allow you to sell first and pay later
Contact your local tax assessor’s office to discuss your options.
What If You Owe More Than Your Home’s Value?
If your property tax debt is high and your home’s value isn’t enough to cover it, you still have solutions:
- Short Sale: If you owe taxes and other debts (like a mortgage), a short sale allows you to sell for less than what you owe, with lender approval.
- Cash Buyer Offer: Some investors buy homes in distressed situations and handle tax debts for you.
- Deed in Lieu of Foreclosure: You can transfer ownership to your lender to avoid foreclosure, but this impacts your credit score.
Final Thoughts
Yes, you can sell your house if you owe property taxes. Whether you choose to pay off the taxes, sell to a cash buyer, or list your home with a real estate agent, you have options. The best choice depends on your home’s value, the amount you owe, and how quickly you need to sell.
If you’re struggling with property taxes and need a fast, hassle-free sale, a cash home buyer can help. You can sell your home as-is, close quickly, and settle your tax debt without stress.
