Selling land with back taxes
Can you sell land with delinquent property taxes? Yes. Learn how back taxes are paid at closing, what tax liens and tax sales mean, and your options.
Falling behind on property taxes for a piece of land you don't use is incredibly common, especially when the land is in another state, was inherited, or was bought years ago as an investment that never panned out. The good news: owing back taxes usually does not stop you from selling. Here's how it works and what to watch out for.
Can you sell land if you owe property taxes?
In almost every case, yes. You still own the land until the county completes a tax sale or tax deed process. When you sell, the title company or closing attorney gets an exact payoff amount from the county tax office, and the delinquent taxes, penalties, and interest are paid directly out of the sale proceeds at closing. You don't need to pay them out of pocket first.
Example: if a buyer pays $20,000 for your parcel and you owe $3,200 in back taxes and penalties, the title company pays the county $3,200, and you receive the remainder (minus any other agreed costs). Many cash buyers also cover the normal closing costs.
How back taxes grow
Delinquent property taxes rarely sit still. Depending on the state, counties add penalties, monthly interest (sometimes 1–1.5% per month or more), and administrative or advertising fees. A few years of unpaid taxes on a modest parcel can add up quickly, which is why selling sooner rather than later often leaves you with more money.
Tax lien states vs. tax deed states
What happens if taxes stay unpaid depends heavily on the state where your land is located:
- Tax lien states: the county sells a lien (the right to collect the debt plus interest) to an investor. You typically have a redemption period, often one to three years, to pay off the lien before the investor can pursue ownership.
- Tax deed states: the county eventually auctions the property itself. Some states give a redemption period after the sale; others give very little time once the deed is issued.
- Hybrid states: some use elements of both.
The key takeaway: once a county schedules a tax sale, your window to sell on your own terms is shrinking. If you've received a notice of an upcoming sale, act quickly, and check the county treasurer's website or call the tax office to confirm deadlines.
Your options if you're behind on land taxes
1. Pay the taxes and keep the land
If you want to keep it, many counties offer installment plans. Ask the tax collector's office.
2. List the land with an agent
This can work if you have time before any tax sale and the land is in a market with steady demand. The back taxes will be paid at closing. The risk is that vacant land can take months to sell while penalties keep accruing.
3. Sell directly to a cash land buyer
A direct buyer can often close in a few weeks, which can matter when a tax sale date is approaching. The offer is usually below full retail value, but there are no commissions, and the back taxes are paid from the proceeds. Be sure there's enough time to close before the sale date. Tell any buyer about the deadline up front.
4. Let the county take it
Some owners simply walk away. That's an option, but you may lose any equity above the tax debt (rules on surplus proceeds vary by state), the delinquency can follow you as a debt in some places, and you lose control of the timing.
What to have ready
- The parcel number (APN) from a tax bill or the county website.
- The current amount owed (the county treasurer's site often shows this).
- Any notices you've received about a tax sale, lien sale, or redemption deadline.
- Names of all owners on the deed, since everyone will need to sign.
Watch out for these red flags
- A buyer asks you to sign over the deed without a title company or attorney handling the closing.
- Someone wants an upfront fee to "help" you sell.
- A buyer won't put the offer and terms in writing.
A legitimate buyer will have the title company verify the tax payoff and pay it directly to the county, so you can see exactly where every dollar goes on the settlement statement.