Hi, it’s Nick with Sell My San Antonio House.
Can I sell my house if I owe back taxes?
You can sell a house where back taxes are owed. The process might look a little different depending on what type of taxes are owed associated with that property.
Most of the time, we’ll be talking about property taxes that are owed to the county that, that property sits in. So, every year there’s a county tax bill, and if you’re not able to make that payment or you fall behind for a few years, those numbers add up, plus there’s usually some interest associated with that. And they’re going to want to collect that money. Can you still sell the property? Yes, you can.
Let’s say you’re going to sell the house for $40,000, but over the years you’ve accrued a delinquent tax bill of $10,000. So, what would happen in that case is the $40,000 contract price, and before you get your money or your proceeds for selling the property, the amount that is owed to the county will be sent to them, in this case, $10,000, and you would get 30,000 sent to you as your proceeds if there was nothing else owed on the property.
The second type of taxes that we see associated with a property would be a federal tax lien or a federal income tax lien, which would be income taxes that have not been paid, and Uncle Sam wants their money when, and if you sell that property. Sometimes those can be very, very large bills.
So, let’s say it’s a $100,000 federal tax lien, but the property value is only $50,000. Sometimes you can talk to Uncle Sam and they will still allow you to sell the property. They will take whatever is leftover as proceeds to reduce your tax bill. And there are cases where, when there are multiple people associated with that property, that they’ll just take a portion of that. But you need to have a little extra time to get out in front and discuss the situation and make sure that you can still sell it and a good outcome for you. Most commonly with property taxes, the county has the right to auction off that property to recoup the money that is owed.
If you’ve received a letter or if you received notice from the county that they plan to auction the property in order to recruit the delinquent taxes, you probably have less time to act before that happens. So, if you want to sell the property, you still can. You’ll sell that property and then they’ll still get their money taken out of the sales price, your proceeds, the rest will go to you and you’re able to move on, but you don’t want to wait until it gets auctioned off and then you’re behind even further. Or the money just continues and continues and continues to build because it’s just money, money, money that’s not going to come to you when you finally do sell that property.
So, can you sell a house where you owe back taxes? Absolutely. You want to find out what kind of taxes those are. And if you know you need to sell that property, you might want to go ahead and start moving forward with the process so that your proceeds are larger because that money has continued to build. I hope this helps. If we can do anything to help you, please reach out (210) 201-6644, or sellmysanantoniohouse.com. Thank you.