Can You Sell a House with a Tax Lien? You Can in Florida — Here’s How

Selling a house is already a complex process, but when a tax lien is involved, it can add an extra layer of challenges. If you’re a homeowner struggling with unpaid property taxes, Internal Revenue Service (IRS) liens or state tax liens, you may be wondering: Can I still sell my house?

The short answer is yes, but with conditions. A tax lien must be resolved before a home sale can close, meaning you’ll need to pay off, settle or negotiate the lien before transferring ownership. Fortunately, homeowners have several options to make the process easier, such as negotiating a settlement, setting up a payment plan or working with a cash buyer who can handle the lien payoff and expedite the sale.

In this guide, we’ll break down how tax liens impact home sales, what steps to take, and why working with a cash home buyer like Florida Cash Home Buyers may be the fastest and easiest solution.

Understanding the Basics of Tax Liens

Before diving into the steps for selling a home with a tax lien, you need to understand what tax liens are and how they can impact a sale.

A tax lien is a legal claim placed on a property due to unpaid taxes, often resulting from back taxes or outstanding tax debt. Whether the lien is from unpaid property taxes, federal taxes or state taxes, it must typically be paid off, settled or negotiated before the home sale can be completed. 

To better understand how tax liens impact the selling process, examine the three types of tax liens that can affect a home sale.

Property Tax Lien (Filed by County Tax Collectors)

• Imposed by local governments when property taxes go unpaid
• Takes priority over all other liens and debts, including mortgages, regardless of when other liens were recorded
• If unpaid, the county may sell a tax lien certificate to investors, which can eventually result in a tax deed sale where the property is auctioned off.
• Check your local county tax site for more information. If you live in Hillsborough County, Pinellas County, or Brevard County, we’ve pulled some resources for you to help you get started

Federal Tax Lien (IRS Liens on All Assets)

• Filed by the IRS when a taxpayer has unpaid federal income taxes
• Follows the “first in time, first in right” rule, meaning priority is determined by the recording date, except when a property tax lien exists, which automatically takes precedence
• Attaches to all personal and real assets, including real estate, bank accounts and wages
• If a taxpayer fully pays the debt, including interest and penalties, they may request an IRS lien release to remove the claim against their assets.
• If there is a federal tax lien on your home, the IRS has several resources and options that can help you determine the best path forward.

State Tax Lien (Florida Department of Revenue Liens)

• Filed by the Florida Department of Revenue for unpaid state income, business or sales taxes
• Priority is determined by the recording date, meaning it is typically junior to property tax liens and mortgages but may take precedence over unsecured debts
• Unlike property tax liens, state tax liens do not automatically attach to real estate but can still impact a home sale if recorded.
• You can learn more about the tax collection process on the Florida Department of Revenue website.

What Every Florida Homeowner Should Know Before Selling with a Tax Lien

It is possible to sell a house with a lien, including a tax lien, but Florida homeowners must be aware of the legal and financial implications before moving forward. A tax lien can complicate the selling process, affecting everything from title clearance to buyer eligibility and closing timelines. 

Below are the most important considerations to keep in mind before selling.

The Lien Must Be Paid or Resolved Before Closing

A tax lien does not prevent a home sale, but it must be satisfied before closing for the title to legally transfer. Since the lien is tied to the property, not the owner, it remains attached to the home until it is paid off, settled or otherwise resolved.

Before a sale can proceed, the title company will conduct a title search, which will reveal any outstanding liens. If the lien is still active, the sale cannot move forward until it is cleared. Additionally, most traditional buyers rely on mortgage financing, and a lender will not approve a loan if there is a tax lien on the property. As a result, traditional buyers typically require the lien to be resolved before completing the purchase.

One alternative is to sell to a cash home buyer, who can purchase the property as-is without mortgage lender restrictions. Many cash buyers also work directly with lienholders to negotiate lien resolution, helping homeowners avoid delays and move forward with the sale more quickly.

Unpaid Tax Liens Can Put Your Home at Risk of Foreclosure

Unpaid tax liens can have serious financial consequences, including foreclosure or asset seizure if left unresolved. Fla. Stat. § 197.122 prioritizes property tax liens over all other debts, including mortgages, meaning they must be paid first when selling a home. Even if you continue making mortgage payments, failure to pay a property tax lien can still result in the loss of your home.

Additionally, Fla. Stat. § 197.432 requires Florida counties to sell tax lien certificates when property taxes go unpaid. Investors who buy these certificates earn interest on the debt, and if the lien remains unpaid, they can initiate a tax deed sale (Fla. Stat. § 197.502), forcing foreclosure. If a tax lien foreclosure occurs, the property is auctioned off, and the tax lien holder — whether it’s the county or an investor — is paid first, ahead of mortgage lenders or other creditors, as outlined in Fla. Stat. § 197.582.

Because tax liens supersede mortgages, lenders may be forced to pay off the outstanding tax debt on behalf of the homeowner to protect their interest in the property. This can lead to higher loan balances, increased financial strain or even foreclosure proceedings if the homeowner cannot repay the lender.

If the lien is federal, the IRS has the authority to place a levy on bank accounts, garnish wages or seize other assets to satisfy the debt. Since tax liens can trigger foreclosure or asset seizures, Florida homeowners should act quickly before losing control over the sale of their home.

Your Home Equity Determines Your Options

Your home’s equity plays a major role in how you can resolve a tax lien and move forward with a sale. Equity is the difference between your home’s market value and the total amount you owe on liens and mortgages. The more equity you have, the easier it is to satisfy the lien at closing.

If you have enough equity, you can arrange for the lien to be paid from the sale proceeds, but it must be included in the sales agreement to ensure it is properly handled before ownership transfers. The title company or closing agent will facilitate the payment and clear the lien before finalizing the sale.

If you lack equity (meaning the lien amount is higher than your home’s value), you still have options:

• Negotiating a settlement to reduce the total amount owed
• Setting up a payment plan to resolve the lien over time
• Selling to a cash buyer who is willing to purchase the property with the lien in place

Cash home buyers often purchase homes with tax liens, even when the seller lacks equity, and may be able to assist in negotiating a reduced payoff with the lienholder.

Lien Discharges and Negotiations Are Possible

Depending on your situation, you may be able to settle or modify the lien before selling, making the process smoother and increasing your chances of closing successfully. Both the IRS and Florida tax authorities offer options to help homeowners resolve their liens, including:

• Negotiating a lower payoff amount, which may allow you to settle the debt for less than the full amount owed
• Requesting a lien discharge, which removes the lien from the property title while allowing it to remain attached to other assets
• Applying for subordination, which does not remove the lien but allows another creditor, like a mortgage lender, to be paid first, and the IRS may approve it if the sale proceeds fully cover the tax debt, ensuring they receive payment before any funds go to the seller

If you’re considering any of these options, it’s best to contact the lienholder early or work with a real estate attorney to determine the best course of action.

A cash home buyer can also help streamline the process by working directly with lienholders to facilitate negotiations, reducing delays and making it easier to close the sale quickly.

Selling to a Cash Buyer Can Speed Up the Process

Selling a home with a tax lien can be challenging, especially in a traditional real estate transaction where disclosure laws and title searches limit buyer options. Fla. Stat. § 695.01 requires sellers to disclose any known liens, meaning homeowners cannot legally hide a tax lien from potential buyers. Additionally, all liens must be properly recorded to be enforceable, so a title search will always reveal outstanding tax debts before closing.

Because most traditional buyers rely on mortgage financing, they are unlikely to purchase a home with an active lien. As a result, many homeowners choose to sell to a cash buyer for a faster and more reliable sale.

Florida Cash Home Buyers specializes in purchasing homes as-is, even with an existing tax lien, and can assist in resolving the lien as part of the sale process, eliminating delays and complications.

How to Sell a House with a Tax Lien in Florida

If you’re a Florida homeowner looking to sell a house with a lien, the process requires careful planning and the right approach to ensure a successful sale. Since tax liens must be resolved before closing, it’s important to understand your available options, legal obligations and potential challenges before listing your home.

Here’s how to navigate the sale while ensuring the lien is properly handled and the transaction moves forward smoothly.

1. Confirm the Lien Amount and Details

Before listing your home, you must first understand exactly how much is owed and who holds the lien. Start by requesting a title search through a title company or real estate attorney to identify all liens attached to the property. This will help ensure there are no unexpected claims that could delay or prevent the sale.

Next, contact the lien holder directly — whether it’s the IRS, Florida Department of State or county tax office — to verify the outstanding balance, penalties and fees. Some lien holders may offer settlement options, such as a reduced payoff amount or an installment plan, which could make resolving the lien easier before closing.

2. Explore the State and Federal Options Available for Resolving the Lien

Before you can sell your home, the tax lien must be resolved to allow the sale to move forward. Depending on your financial situation and the type of lien, you may have several options to remove, negotiate or manage the lien before closing. Understanding both Florida and federal tax lien resolution strategies can help you determine the best approach and ensure a smoother, more efficient sale process.

Check Whether the Lien Is Still Valid

Both Florida law and federal law impose a statute of limitations on tax liens, meaning that if the taxing authority does not actively pursue collection efforts within a set timeframe, the lien may expire and become unenforceable. However, certain exceptions can extend this period, so homeowners should review tax records or consult a tax attorney to determine whether their lien is still legally binding.

Take a closer look to understand the statute of limitations and key exceptions for both Florida and federal tax liens.

Florida’s Statute of Limitations on Tax Liens: Under Fla. Stat. § 95.091, a Florida tax lien expires 5 years after the tax becomes delinquent unless legal action is taken to enforce it. However, important exceptions can extend the enforceability period.

• If a tax certificate has been sold: When unpaid property taxes lead to a tax lien certificate sale, the lien remains valid even after five years. The certificate holder can apply for a tax deed sale, which can result in foreclosure if the homeowner does not pay the debt.
• If the property qualifies for the homestead exemption: Homesteaded properties in Florida receive some protection from tax deed sales. Fla. Stat. § 95.091(1)(b) states that if a tax lien was issued under Fla. Stat. § 196.161, the enforcing agency has 20 years to act rather than the standard 5 years.

Federal Statute of Limitations on Tax Liens: For IRS tax liens, the statute of limitations is generally 10 years from the date of assessment (Internal Revenue Manual § 5.17.2). Once this period passes, the IRS can no longer legally enforce the lien, unless certain actions extend the timeframe.

• A Collection Due Process (CDP) hearing request: If the homeowner disputes the lien, the enforcement period may be extended.
• A voluntary extension agreement: Some taxpayers enter agreements that extend the lien’s enforceability beyond 10 years, often as part of a settlement negotiation.

If your tax lien is still valid, several other state and federal options are available to help resolve it.

Pay Off the Tax Lien in Full

The most direct way to resolve a tax lien is to pay it off before closing, ensuring a smooth sale and preventing any delays in transferring the title. Once fully paid, the lien no longer has a legal claim on the property, but additional steps may be needed to remove it from official records.

The process of removing a lien from official records depends on whether the lien was placed by a Florida taxing authority or the IRS.

Lien Release (Removes the Lien From the Property Title): After full payment, the lienholder must issue a lien release, which legally removes the lien from the property title.

• For Florida tax liens, the tax authority automatically issues a lien release, and the lien is removed from public records. No further action is required from the homeowner.
• For IRS tax liens, the IRS automatically issues a lien release within 30 days of full payment. However, even after release, the lien may still appear in public records, which could impact your credit score and property title records.

Pay Off the Lien from Sale Proceeds

If you don’t have the funds to pay off the lien up front, you may be able to use the proceeds of the sale to cover the debt. However, this must be worked into the sales agreement to ensure the lienholder is paid before ownership transfers.

For Florida property tax liens, the lien must be included in the sales contract, and the title company or closing agent will ensure the debt is paid before disbursing funds.

For IRS tax liens, two key options can help facilitate the sale when full payment of the lien isn’t possible upfront, a Certificate of Discharge and Subordination.

1. Certificate of Discharge (Allows the Sale to Proceed Without Removing the Debt — IRS Only)

A Certificate of Discharge allows a property to be sold free of an IRS lien, while the lien remains attached to the taxpayer’s other assets.

• This does not eliminate the debt, it simply removes the IRS’s claim on the specific property being sold
• This is useful if the homeowner has other assets that the IRS can still collect against or if the sale will partially cover the lien amount but not all of it
• Homeowners can apply for a Certificate of Discharge using Form 14135, allowing the sale to move forward

This option is not available for Florida property tax liens — these must be fully paid before the sale can proceed.

2. Subordination (Allows Other Debts to Be Paid First — IRS Only)

A lien subordination does not remove the IRS lien but allows another creditor, such as a mortgage lender, to be paid before the IRS when the home is sold.

• The IRS still gets paid at closing if there are enough sale proceeds to cover the debt
• This option can be useful if the homeowner needs to pay off the mortgage first to make the sale possible, while ensuring the IRS still receives its share
• Homeowners can apply for a Lien Subordination using Form 14134, which may allow the sale to proceed while the lien remains on other assets

Subordination is not available for Florida property tax liens, as these must be paid before any other debts at closing.

Negotiate a Settlement or Set Up a Payment Plan

If paying off the lien in full isn’t feasible, you may be able to settle the debt for less than the total amount owed or arrange a payment plan to continue making payments while selling the home. These options are primarily available for IRS tax liens, but Florida also allows installment agreements and, in some cases, negotiated settlements.

1. Offer in Compromise (Settle for Less Than the Full Amount)

An Offer in Compromise (OIC) allows some homeowners to settle their tax debt for less than the total amount owed if they can demonstrate financial hardship.

This may be a good option if:

• Paying the full amount would cause significant financial hardship
• You are unable to pay the lien in full before selling but have a reasonable offer to resolve a portion of the debt

For IRS tax liens, homeowners can submit an Offer in Compromise application with Form 656.

For Florida tax liens, you won’t find a formal Offer in Compromise application process. Instead, settlements must be negotiated directly with the Florida Department of Revenue (DOR), usually with the help of an experienced tax professional.

2. Payment Plan (Resolve the Debt Over Time While Selling the Home)

If you cannot pay the full lien amount before selling but still want to resolve the debt, you may be eligible for a payment plan (installment agreement) with either the IRS or the Florida Department of Revenue. This allows you to continue making monthly payments while selling your home.

This may be a good option if:

• You do not qualify for an Offer in Compromise.
• You have steady income and can commit to structured monthly payments.

For IRS tax liens, homeowners can request a payment plan using the Online Payment Agreement Application.

For Florida tax liens, the Florida Department of Revenue does not allow taxpayers to automatically apply for an installment agreement. Instead, homeowners must call or visit a local service center to request a stipulated time payment agreement and must:

• Provide financial documents proving they cannot pay the full debt up front
• Pay at least 25% of the debt as a down payment
• Agree to pay the full balance within one year

Sell to a Buyer Who Can Handle the Lien Payoff

For homeowners who need to sell quickly or want to avoid complex negotiations, selling to a cash buyer may be the simplest solution. Cash buyers specialize in purchasing homes as-is, even if the property has a tax lien, and often handle the lien payoff or negotiate with the lienholder on your behalf — eliminating delays and reducing stress.

Working with a cash buyer offers several advantages:

• No realtors or mortgage lender involved, which means you can close faster
• Lien negotiation assistance, with some cash buyers working directly with lienholders to settle or reduce the debt
• No commissions, repairs or closing costs, meaning you keep more money in your pocket

If you’re considering this option, check out our guide on selling a house as-is to learn what affects pricing and the benefits of skipping repairs and contact us for a fair cash offer.

3. Work with a Title Company or Closing Attorney

While Florida law does not require buyers or sellers to hire an attorney to close a home sale, working with a title company or closing attorney is recommended, especially when selling a property with a tax lien. These professionals help protect your rights, ensure proper lien resolution and facilitate a smooth closing process.

If the lien is being paid off using sale proceeds, the title company or closing attorney will ensure the lienholder receives payment before ownership transfers. If a settlement or negotiated payoff was arranged, they will also coordinate the lien release, ensuring it is properly recorded and removed from the property title. For homeowners selling to a cash buyer, the closing attorney may negotiate directly with the lienholder, helping to settle or reduce the debt and allowing for a faster closing.

4. Close the Sale and Transfer Ownership

Once the tax lien is paid off, settled or discharged, the title is cleared, and the sale can officially move forward. If selling through a traditional buyer, the buyer’s mortgage lender will conduct a final title check before approving the sale, ensuring that all outstanding liens have been resolved. This process can sometimes cause delays if last-minute issues arise.

If selling to a cash buyer, closing can happen quickly without financing delays. At closing, the lien is officially removed, ownership transfers to the buyer and you receive any remaining sale proceeds, if applicable.

The Benefits of Choosing a Cash Buyer for a Tax Lien Home Sale

Selling a house with a tax lien can be stressful and complicated, but a cash buyer can help simplify the process and remove many of the common roadblocks.

• No repairs needed: Sell your home as-is, even if it has tax liens or other issues.
• Fast closing: Sell fast and as-is to professionals who have navigated similar issues.
• Lien negotiation assistance: Some cash buyers work directly with lienholders to handle lien payoffs, reducing hassle for sellers.
• No realtor commissions or closing costs: Keep more of the proceeds from the sale.
• Avoid foreclosure: Selling quickly prevents credit damage and helps homeowners move on without financial burdens.

How a Cash Sale Works With a Tax Lien

1. Get a cash offer: A cash buyer will assess your home’s value and make a fair, no-obligation offer.
2. Conduct a title search: The contract is sent to a title company, which orders a title and lien search to verify outstanding debts.
3. Schedule a property inspection: The buyer schedules an inspection to confirm the property’s condition and estimate repair costs.
4. Close the sale: Once the lien is cleared and everything looks good, the sale is finalized.
5. Receive the funds: After signing the closing documents, the proceeds are wired to your bank account or paid via certified cashier’s check.

Navigating a Tax Lien Sale with Confidence

Selling a house with a tax lien in Florida is possible, but it requires careful planning and the right approach to ensure the lien is resolved before closing. Homeowners must consider how delinquent taxes impact the sale process, title transfer and potential foreclosure risks, while exploring options such as paying off the lien, negotiating a settlement or selling to a cash buyer for a faster resolution. By understanding these factors, sellers can make the best financial decision for their situation and avoid unnecessary delays. 

For those looking for a quick and painless solution, selling to a cash buyer can eliminate financing delays and even provide assistance with lien negotiations, making the process smoother. If you’re facing a tax lien and need to sell quickly, working with an experienced cash home buyer can help you resolve the lien and close the sale in as little as 15 to 30 days. Contact Florida Cash Home Buyers today for a no-obligation offer and take the next step toward selling your home with confidence.