5 Things You Can Do if Your Home has a Tax Lien Against It

If your home has a tax lien on it, you’re probably experiencing financial difficulties. Often, homeowners struggling to pay their property tax or mortgage don’t know where to turn and eventually face foreclosure and a subsequent hit to their credit. But can you sell a house with a property tax lien?

There are ways to avoid foreclosure or other legal actions. To remove a tax lien, you need to pay allowed taxes and any late fees and interest you may have incurred. The easiest way to do this is by selling your property and using the profit to pay off your debts.

It’s not always easy to sell a property with a tax lien. To make the process easier and more profitable, follow these tips.

1. Research Tax Liens

Before you ask how to sell a house with a tax lien, you first need to know what a tax lien is, why your house has one, and how to get rid of one. 

A tax lien is a type of property lien levied by the Florida Revenue Service when a property owner falls behind in their tax payments. Before placing a tax lien, the FRS will send you a delinquency notice and a bill (Notice of Amount Due).

If you don’t pay your taxes in full within 90 days after receiving the Notice of Amount Due, the FRS will take further action. They may outsource your debt to a collections agency, or they may file a tax lien. Failure to pay certain taxes like property within a set timeline automatically triggers a tax lien.

If you cannot pay your taxes in full, the FRS also has an option to set up a payment plan on a case by case basis.

The Internal Revenue Service can also place a tax lien on your home for unpaid federal taxes. 

Removing home liens isn’t always easy. Often, homeowners cannot pay their taxes because of unexpected financial hardships, like lay-offs at work, medical expenses, or car accidents. In addition to causing money problems, these situations make life more stressful.

While the simplest way to remove a tax lien is to pay off the taxes, if you’re in dire financial straits, that may not be possible. The next best answer to how to remove a tax lien from your property is: sell it and use the profits to pay your back taxes.

2. Home Improvement

If you’re going to sell your house, you’ll want to do everything possible to make it attractive to buyers. If you have problems with your plumbing, foundation, or kitchen, you might want to fix them before putting your house on the market.

However, if you don’t have the cash or time, you can focus on smaller projects that will make your home look more appealing. A new coat of paint and a freshly mowed yard will give buyers a better first impression than high grass and cracked walls.

3. Know Your Home’s Value

When determining your selling price, you’ll need to look at several factors. First, you’ll want to see what similar houses are selling for in your area. You’ll also want to look at the current housing market and research recent trends.

Next, you should see how much you have left on your mortgage and how much you owe in property taxes. The goal is to sell your home for enough to pay the remaining mortgage and pay your back taxes in full.

Hopefully, your selling price will cover all your debts because any remaining tax debt will still be owed. However, if you set your price too high, it may take longer to sell your house.

4. Offer in Compromise

Another answer to the question of how to remove a tax lien is negotiating an offer in compromise. If you have almost enough to pay your tax debts, the FRS or IRS may consider allowing an offer in compromise.

Each case is decided individually. The tax service will determine whether you have the financial capability to pay the agreed rate, current expenses, income, and equity of your assets. If the tax service believes you will hold up your end of the bargain, they may agree to accept a lower sum for your tax debt.

However, this option is not for everyone. If your offer is too low, the tax authority may choose to foreclose on your home instead.

5. Find a Cash Home Buyer

So, can you sell a house with a tax lien against it? The answer is yes, but with difficulty. If you choose to go the traditional route of listing your home yourself or working with a real estate agent, you’ll need to add removing the tax lien to the list of things to do before closing. It can be challenging since the house cannot legally change hands with an existing tax lien.

Working with a cash home buyer like Meli makes the process easier. Instead of finding buyers, advertising, arranging multiple open houses, and handling the legal process yourself, you can let us do all the work for you.

Our 4-step process will have you closing in under 30 days, and you won’t need to pay closing fees. We can also provide information and guidance about removing a tax lien and how we purchase homes with existing property liens.

We pay you in full, upfront, in cash. Instead of waiting for a loan to come in or having to cancel a sale because of a buyer’s financial problems, you will receive your payment quickly so you can clear up your tax debt.

Contact Us Today

If you have a tax lien on your home in Florida, selling the property might be the best way to remove it. Call Meli today at (407) 305-5008 to start the process. Within 24 hours, a team member will respond with any questions and set up a no-obligation walkthrough of your property.

Any offer we make has no strings attached, and you can pull out of the deal at any point. If you have any questions throughout the process or merely want some more information about selling a house with a tax lien, our team is always happy to help.

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Meli encourages you to reach out to an advisor regarding your own situation. Please consult with your advisor when making legal or financial decisions.

Image Credits




Meli Can Help. Get Started Now.