What Is a Tax Lien in Real Estate?

A tax lien is a legal claim placed on a property by a government authority for unpaid property or income taxes. It must be resolved before ownership can transfer in a real estate sale.

🏡 How a Tax Lien Works

When property taxes go unpaid, the city, county, or IRS can file a lien against the property. This lien ensures the government is repaid before the home can be sold or refinanced. If ignored, the lien can lead to a tax sale or foreclosure.

đź’° Types of Tax Liens

  • Property tax lien: Filed by your county or municipality for unpaid property taxes.
  • Federal tax lien: Filed by the IRS for unpaid income or business taxes.
  • State tax lien: Filed by your state revenue department for unpaid state income taxes.

Regardless of type, all tax liens cloud the title and must be cleared before the property can transfer ownership.

🧾 How to Remove a Tax Lien

  • Pay the outstanding taxes in full and request a lien release.
  • Work with your title company to confirm the release is recorded.
  • For IRS liens, request a formal “Certificate of Release” after payment clears.
  • Verify with a title search that the lien no longer appears before listing FSBO.

Clearing the lien ensures you have a clear title when selling your property.

đź’ˇ Why Tax Liens Matter for FSBO Sellers

Buyers and lenders require clear title before closing. If you’re selling FSBO, addressing a tax lien upfront prevents closing delays and keeps your sale on track when listing on the MLS.

🏠 Clear Liens and List with Confidence

Once your taxes are paid and the lien released, Brokerless helps you list on the MLS for maximum exposure — without paying 6% commission.

View Flat Fee MLS Plans

âť“ Tax Lien FAQ

1. Can you sell a home with a tax lien?

Yes, but the lien must be paid or released before closing. Most buyers won’t proceed with an active tax lien.

2. How do I know if I have a tax lien?

Check your local property tax office or order a title search to confirm.

3. How long does a tax lien last?

Property tax liens typically remain until paid. Federal tax liens may expire after ten years if not refiled.

4. Can a tax lien affect my credit?

Federal tax liens are no longer reported on credit reports, but they can still impact loan approval or refinancing.

5. How can Brokerless help?

Once your lien is cleared, Brokerless helps you list FSBO on the MLS to reach more buyers affordably.

đź“š Explore more real estate terms in our What Is in Real Estate glossary.