How to Sell Your House with a Tax Lien
A tax lien on your property does not have to prevent you from selling. While it adds complexity to the transaction, homeowners sell tax-lien properties every day. Here is what you need to know to navigate the process successfully.
What Is a Tax Lien?
A tax lien is a legal claim placed on your property by a government entity — typically the IRS for federal taxes or the county for unpaid property taxes — when you fail to pay taxes owed. The lien attaches to the property and must be satisfied (paid off) before or at the time of sale. In Onondaga County, unpaid property taxes can result in a county tax lien that accrues interest and penalties over time.
Can You Sell a House with a Tax Lien?
Yes. The lien does not prevent you from selling — it simply means the lien must be paid off from the sale proceeds before you receive any equity. If the sale price exceeds the combined total of your mortgage payoff and the tax lien, you walk away with the difference. If the lien and mortgage together exceed the sale price, you may need to negotiate with the lienholder.
IRS Tax Liens
Federal tax liens are more complex than property tax liens. The IRS has 30 days to respond to a notice of sale, and in some cases can exercise the right to purchase the property at the sale price. In practice, the IRS almost never exercises this right, but the process requires careful coordination with a real estate attorney. The IRS also has a process called a "discharge of lien" that allows the lien to be removed from a specific property while remaining attached to other assets.
Property Tax Liens in Onondaga County
Onondaga County sells tax liens to investors after a period of delinquency. If your property tax lien has been sold to a third party, you will need to pay off that investor (plus accrued interest) at closing. The title company handles this coordination as part of the standard closing process.
Selling with a Tax Lien to a Cash Buyer
Cash buyers who specialize in problem properties are experienced with tax lien situations. ReliefRealty purchases homes throughout Onondaga County with IRS liens, property tax liens, and other encumbrances. We work with title companies and attorneys to ensure all liens are properly addressed at closing. Contact us for a free, no-obligation cash offer and a clear explanation of how the lien will be handled.
