After the lien is placed on your house, you won’t be able to sell the house until you pay the delinquent taxes. You can even go through the entire process of selling your home with a property tax lien – you just have to pay the tax lien before closing the sale. (iStockPhoto) It's one of the scarier terms in the Internal Revenue Service’s lexicon: tax lien. When you’re selling the house, the lien amount is added to your expenses during the closing. The federal tax lien has to greater then the amount of equity in the house. ... near the same level of capital traditionally used to buy and flip a house," Merrill says. If you owe taxes and haven't been able to pay them, you … Remember that whatever profits you make from the sale will be less the amount of the tax lien. If you can’t pay your tax bill all at once, you can try to explain your situation to the county treasurer. If you are planning on selling your home, and you have a lien on your property, you may be required to take certain steps in order to complete the sale of your house. This shows on the title search done by a title company during the sale, so there is no way to hide this from the final buyer. The final section on both forms is the Declaration. You might have some trouble selling your house if you have a property tax lien, though. Where can you find a property tax lien? Check the Waive box in this section. If you have unpaid debt, a tax lien could be put on your home to ensure the money is paid when you sell your house. If you fail to keep current on your property taxes or other municipal charges, like a sewer or water bill, the past-due amount becomes a lien on your home. All states have laws that allow the local government to then sell your home through a tax lien process to collect the delinquent taxes. If that’s the case you can sell the home by getting a federal tax lien certificate of discharge. Local governments rarely forgive their property tax liens mainly because they can foreclose for such liens. Section 16 of form 14135 is if you bought property with a lien attached where you are not the taxpayer and you checked 6325(b)(2)(A) or (B) as your basis for discharge in section 7. Please read Publication 783, Section 7 for further explanation. Whether you need to sell your home to help pay off a tax lien, or you’re moving to a new home, you can absolutely sell your home if it has a tax lien attached. Most liens are considered satisfied once a property is sold by the state, but liens could remain for special taxes or assessments and from a taxing entity that chooses not to consent to the tax sale. 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