Selling Your House Despite a Federal Tax Lien

Selling Your House Despite a Federal Tax Lien

If you ever find yourself owing money to the IRS, it can feel like you’re trapped. The government may put what is known as a tax lien on your home. A federal tax lien can stop you from selling your house, refinancing your mortgage, or acquiring new credit until the full debt owed to the IRS is paid. The lien can also be attached to your money, vehicles, and other properties in your name. Filing for bankruptcy won’t help. You need another option altogether.
You do have a few options to move past the federal tax lien and sell your house, though.

Home Equity

Your first option is to use your home equity. If you wish to refinance your mortgage, the federal government may look kindly upon the act if you are willing to “subordinate” the tax lien. Essentially, you would use the home equity to repay your owed taxes.

Of course, the tax lien makes it difficult to refinance. You must demonstrate to the IRS that you fully intend to repay the taxes using the home equity from the refinance. Once the taxes are paid, you can sell your house successfully.

Real Estate Investors

When you sell your house, but still have money to pay on the mortgage, the money from the sale will go towards the remaining mortgage. Then, if you have a tax lien in place, you need to put more money from the sale towards the payment of the taxes. Typically, the IRS will want the payment in full, unless they agree to a payment plan.

Your only surefire option is to sell the house for a reasonable amount, pay both the mortgage and taxes, and avoid the housing market and fees from the real estate agencies in town. You need to sell to a real estate investor who will put more money in your pocket for the property.

Can You Sell Your House With A Lien On It?

Selling a house with a lien on it is not impossible, but it presents challenges. A lien is a legal claim on a property, ensuring the debtor pays off an outstanding debt. In the case of a federal tax lien, it means the homeowner owes money to the IRS. While the lien is in place, the homeowner might face restrictions when attempting to sell. However, a sale can still proceed if the proceeds from the sale cover the lien amount. Essentially, during the property’s sale, the amount owed to the lienholder (in this case, the IRS) is deducted first, ensuring they get paid before the homeowner receives any funds. Consultation with a real estate attorney can provide guidance tailored to the specific situation.

What Is A Tax Lien On Your Home?

A tax lien on your home represents a claim by the government on your property due to unpaid taxes. If you owe federal taxes and neglect or fail to pay them, the IRS can place a tax lien on your assets, including your house. This lien is a public record, meaning it can negatively impact your credit score and make it harder to secure loans or refinance your mortgage. The purpose of the lien is to protect the government’s interest in your assets, ensuring they receive payment for the owed taxes either from the proceeds of a sale or another arrangement. Until the debt is settled, the lien remains attached to the property, even if it changes hands.

What Happens When The IRS Puts A Lien On Your House?

When the IRS places a lien on your house, it establishes a legal claim against your property due to unpaid federal taxes. This means that if you attempt to sell or refinance your home, the lien has to be addressed before the transaction can go through. A lien can also harm your credit score, limiting your ability to borrow money or get credit. Even if you sell your property, the IRS has a claim on the proceeds until the debt is satisfied. It’s crucial to understand that a tax lien is a claim against assets, not a seizure. The IRS might choose to seize property through a tax levy, a more severe action than a lien, if the tax debt remains unpaid.

Don’t Let a Tax Lien Hold You Back! Get a Fast, Fair Cash Offer Today!

Navigating the complexities of a tax lien on your home can be overwhelming. But you don’t have to go through it alone. At Cash for Vegas Homes, we specialize in offering speedy and fair solutions to homeowners like you. No need to wait months or even years trying to settle with the IRS. Simply give us a call at (702) 850-8001. Our team is ready to provide a cash offer for your property, ensuring a hassle-free process and peace of mind. Don’t let a tax lien stand in your way. Secure your financial future with Cash for Vegas Homes today!