Property taxes can get away from you fast. One missed deadline snowballs into penalties, then liens, and suddenly, selling your land feels impossible. The good news? You can sell land with a tax lien — you just need to follow the right steps.
💡 Quick Answer: Yes, you can sell land with a tax lien. The lien must be paid off—usually from your sale proceeds—before the buyer can receive clear title. A title company or escrow agent typically handles this payoff at closing.
This guide walks you through how tax liens work, how to resolve or work around them, and how to successfully sell your property even with a lien attached.
Quick Checklist: How to Sell Land with a Tax Lien
- Request a payoff amount from your state or county tax collection agency.
- Be upfront with buyers about the lien to avoid surprises during title work.
- Coordinate with your title company or escrow agent. They’ll ensure the lien is paid at closing.
- Prepare for funds to be diverted. A portion of your sale proceeds will go toward clearing the lien.
- Handle co-owners early. If multiple people are on title, make sure everyone understands how the lien affects their equity.
- Consider negotiating with the taxing authority (payment plan, hardship relief, offer in compromise) before listing, if possible.
📌 Tip: Many land buyers are comfortable purchasing land with tax liens. Selling directly to them can simplify the process.
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Understanding Delinquent Property Taxes and Tax Liens
Before selling, it helps to understand exactly what you’re dealing with.
Delinquent property taxes
Property taxes become delinquent when payments are missed. Penalties and interest begin to accrue immediately.
Tax liens
A tax lien is a legal claim placed on your property for unpaid taxes. It must be satisfied before the property can be transferred. Liens can be state, local, or federal.
Collection process
The county or state sends notices and eventually may sell the lien to investors or initiate forfeiture if the debt remains unpaid.
Tax forfeiture
If you ignore the lien long enough, the government can legally take ownership after a “redemption period.” At that point, you lose title and can’t sell the property yourself.
Have a different type of title problem? Check out our complete guide to selling land with title issues.
Pre-Sale Strategies: Resolving or Mitigating Tax Liens
Taking action before listing can prevent delays and increase your net proceeds.
- Contact your tax collection agency to clarify what’s owed.
- Ask about payment plans or hardship programs.
- Explore deferrals or exemptions for seniors, low-income owners, or medical hardship.
- Negotiate when possible. Some states allow “offers in compromise” for reduced payoff amounts.
Navigating Legal Complexities and Title Issues
Tax liens affect title, so it’s critical to understand how liens interact legally.
Lien priority rules
Property tax liens usually have super priority, meaning they get paid before mortgages or other claims. This impacts how sale proceeds are distributed and what’s left for you.
State-specific tax lien & tax deed laws
Every state has its own rules for:
- Redemption periods (months vs. years)
- Notification requirements (errors here can invalidate sales)
- Tax deed procedures (some states grant ownership immediately; others require a quiet title action)
Understanding your state’s system helps set realistic expectations for buyers and timelines.
Title insurance & quiet title actions
Title insurers may be cautious with tax lien properties. A quiet title action can clear any lingering ownership disputes and make the property insurable, which can speed up a sale.
Should You Pay the Tax Lien Yourself or Sell the Property?
Landowners often face a choice: pay off the lien or sell the property. Both have pros and cons, mostly balancing ownership vs. liquidity.
Pay the Lien Yourself
- ✅ Keep ownership and future value.
- ✅ Avoid rushed sale.
- ❌ Requires immediate cash.
- ❌ Ongoing risk if other liens exist.
Sell the Property for Cash
- ✅ Instant cash to cover debt.
- ✅ Eliminates risk of losing property.
- ❌ Sell at lower price.
- ❌ Lose use of the property.
Pay vs. Sell Decision Matrix
| Scenario | Recommendation | Reason |
|---|---|---|
| You have plenty of cash & want to keep land | Pay the lien | Maintains ownership, avoids discounted sale |
| You lack cash or have other expenses | Sell the property | Eliminates debt immediately, avoids penalties |
| Property is near forfeiture | Sell the property | Quickest way to protect value |
| The land is a long-term investment and you can afford the payments | Pay the lien | Preserves future appreciation and control |
Take Action Early
Delinquent taxes don’t have to derail your sale. Whether you pay off the lien before listing or clear it at closing, proactive action is key.
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Frequently Asked Questions
What happens if I ignore a tax lien?
Ignoring a tax lien has serious consequences. The amount owed will continue to accrue penalties and interest. Eventually, the county may sell the lien or initiate proceedings to seize and sell your property outright, potentially resulting in the loss of your property.
What does it mean if a tax lien is sold?
If your tax lien is sold, a private investor has purchased the right to collect the unpaid taxes from you. This means your debt is now owed directly to that investor, not the county. They will expect payment, often with additional interest, and can pursue legal action if the debt remains unpaid.
Please consult your financial advisor, accountant, real estate attorney, or tax specialist. This article is for informational purposes and is not tax or legal advice.
