Can I Sell My House With a Tax Lien?
There is a common misconception that a house with a tax lien cannot be sold. Though a lien can make selling a property more challenging, it is still possible to complete the sale. Even if you don’t have enough equity built up in the home to pay the tax lien, there are still plenty of options available for completing the sale. We Buy Houses Las Vegas is interested in buying your Las Vegas–area home, even if it has a tax lien. Sell your house fast to our home buyers in Las Vegas, and your tax lien nightmare will be in the rearview mirror for good.
You Have the Freedom to Sell
Even if there is a federal tax lien on your home, you can sell it. However, it is in your interest to meet with a tax professional to get a sense of how the tax lien might impact the sale. After all, the last thing you want is to complete negotiations and attempt to finalize the sale, only for it to be held up by the tax lien. In short, a lien is a legal claim against the home’s value for unpaid taxes. The federal government will attempt to collect this debt before the home is sold. However, even if the unpaid tax debt is transmitted to the IRS after the home’s sale, you are still legally empowered to sell the property.
Closing a Home Sale When There Is a Federal Tax Lien
The home sale closing can occur if there is enough equity in the house to cover the cost of the federal tax lien. The proceeds from the sale of the property are reduced by the amount of the lien. However, if there is not enough equity available to cover the full cost of the tax lien, it is possible to close the sale if you proactively reach out to the IRS to settle the lien. Above all, it is in your interest to settle the tax lien with the IRS prior to the sale of your property.
It might even be possible to successfully dispute the tax lien if it was filed in error. A court hearing sets the stage for you to request collection due process, where you make your case for why the tax lien is incorrect. However, if the tax debt is deemed legitimate, it can be removed by resolving the debt with a payment plan. Such a plan helps you settle the debt for less than the IRS claims is owed, especially if you can prove you don’t have the financial resources necessary to pay the entirety of the debt in full.
Alternative Options for Selling a Home With a Tax Lien
The federal tax lien on your house can also be removed with a Certificate of Discharge. This discharge, available through the IRS, is available to those who have a comparable property that the claim can be transferred to.
Another option is to apply for a withdrawal. Withdrawals remove the federal tax lien from the property, empowering you to sell it. However, the withdrawal does not erase the tax debt.
There is also the option of applying for a Certificate of Subordination. Such a certificate empowers another creditor, meaning either a mortgage lender or a bank, to be prioritized for payment in front of the IRS. This arrangement allows the house sale to move forward even if the federal tax lien remains active.
The Tax Lien Might Soon Expire
If the tax lien has been applicable to the property for nearly a decade, it might make more sense to sell the property after the 10-year statute of limitation expires. This expiration liberates you to sell the property without having to pay the tax lien. However, the IRS might not let the debt expire if the amount owed is significant.
When in Doubt, Opt to Pay the Tax Lien at Closing
The proceeds of your property’s sale to We Buy Houses Las Vegas can be used to pay the tax lien. Request that your attorney pay the money owed through the proceeds of your home’s sale at the closing, and the lien will be released, allowing for a seamless ownership transition of the property to the buyer and liberating you to move on with life without owing money to the government.
We Buy Houses Las Vegas Wants to Buy Your House
If you are considering selling your house, reach out to We Buy Houses Las Vegas before putting it on the market. We buy houses as-is, with timely, fair cash offers for homes throughout the greater Las Vegas area. Contact us today to get an offer for your home. You can reach us by phone at 702-246-2000 or online through our contact form to learn more about how to sell your house fast.