Things to Know About Lien and Property Taxes

Selling a house is a humongous task, and there are various factors that the seller has to consider. Moreover, they have to get clearance and arrange for various other documents, which can prove to be a hectic task. It is tough if you have not sold a house before. Things become more complicated if the property has a lien on it. 

Different types of liens can be put on the property, but one of the common ones is a property tax lien. Herein, the state authorities can put a lien on the house for unpaid property taxes. 

These taxes are crucial for the state as the funds help them build and maintain a city’s infrastructure. Your property will be on the line if you have missed many payments and cannot pay them. 

Many homeowners wonder, “can you sell a house with property taxes owed?” to the government. 

Technically, you can sell the property with a lien on it as long as the other party is aware of it and understands that they will be undertaking the lien. 

Here are some things that you must know about lien and property taxes. 

How does a lien affect the sale of a property? Things to Know About Lien and Property Taxes

 

If the property has back taxes, you can get a clear title of the property. 

These taxes must be paid to acquire a clear title from the authorities for the sale. Most homebuyers will not pursue the purchase if they do not get a title certificate. Moreover, banks also do not approve loans for properties with no clear title. 

Common reasons why people miss out on tax payments

Unexpected life events, accidents, health conditions, loss of a loved one, job loss, divorce, and financial turmoil are common reasons why people fall behind on their tax payments. 

When you miss the payment deadline, your property will accumulate penalties and interest on the tax amount. So, the combination of the two can amount to a substantial fee which could be difficult for a homeowner to pay. 

How long do you get to pay the property tax?

While the specifics are different in each state, it is common for the authorities to allow 60 to 120 days to pay taxes without imposing any penalties. 

Can you sell a house with property taxes owed?

Yes, you can sell a property with house taxes owed. However, a traditional home buyer will be hesitant to buy a property with a lien on it, so you must reach out to an investor who can buy the house in cash and undertake the lien. 

Many real estate investment companies seek houses with lien for investment purposes. These companies can even offer you cash payments for the home. 

If the government is pushing your house for foreclosure, reaching out to such companies is the only option you have, as they can close the sale and clear your debt instead of the government seizing the assets and auctioning them off. 

The best way to sell a house with back taxes is by reaching out to an investment company. They will take care of the lien amount and the closing costs while providing you with a fair amount for your property.

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