When selling your house, it can be difficult to know what will prevent you from doing so, and what doesn’t matter. If you’re interested in selling your house and owe property taxes, the good news is that you can still sell your home. That being said, the property tax will still have to be paid, whether by you or a potential buyer.
The following are options for how this can be done:
- Pay Tax Liens with the Money from the House.
- Pay the Taxes out of Pocket.
- Apply for a Subordination from the IRS.
- Consider Selling to an As-Is Home Buyer
Paying for the Taxes After Selling the House
The easiest option for paying back property taxes that are still owed is to use the money received from selling the house. If this is the option you’ve chosen, it’s important to make sure that you factor in any closing costs and any other fees associated with selling a house. If the amount you’re receiving won’t cover both the cost of closing and taxes, there are other options to pay off the tax lien such as financing and subordination.
Options for Paying the Taxes out of Pocket
So, you’ve sold your house but didn’t make enough from the sale to pay off the property taxes. Property taxes are attached to the house itself, not the owner, so if you can’t afford to pay off the taxes, this will fall on potential buyers. Knowing this, most potential buyers will probably not agree to buy your house. If you reach out to the IRS, they might allow you to set up a payment plan until the taxes are paid off or apply for an Offer in Compromise. An Offer in Compromise is when the IRS agrees to accept less money than the amount that is owed. Bankruptcy is also an option, but this should be a last resort after you’ve exhausted all other options.
IRS Subordination
While property taxes have to be paid off, the government will generally work with you to pay back the amount that you owe. IRS subordination is when the IRS agrees to allow other lenders to be put before the taxes owed to them, to allow for the sale of the house. The property tax that is owed doesn’t disappear, but a subordination will allow for the taxes to be attached to other assets you hold so that you can pay the taxes later. This can be useful if you’re interested in taking out another loan for a new house, or a loan for something else down the line.
Consider Selling to an As-Is Home Buyer
The process of subordination and owing the IRS can be frightening, but selling to a St. Louis as-is home buyer can be a great way to settle the debt. As-is home buyers are committed to making the process of selling your home as hassle-free as possible. They aren’t scared away by the expense of taxes and maintenance. These buyers have the resources to bypass waiting on banks and can offer you all-cash for your house in as little as a week.
If you’re interested in selling your house in St. Louis to an all-cash, as-is home buyer, Evervest Home Buyers is a popular local favorite. They’ve sold more than 700 homes in the area and can work with you to schedule a consultation at a time that works best for you. They aim to make the process as quick and easy as possible so that you don’t have to deal with the stress of selling your out-of-shape property. If you’re interested in working with Evervest Home Buyers and you’d like to schedule a consultation, call us at (314) 730-0366, or Contact Us today!