How Property Tax Liens Work in Indiana
When you fall behind on property taxes in Indiana, the consequences follow a specific legal process governed by Indiana Code IC 6-1.1-24 and IC 6-1.1-25. Understanding this timeline is critical because once a tax certificate is sold, you're on a countdown to losing your home:
This is the fact that catches most homeowners off guard: under Indiana law, property tax liens have priority over all other liens, including your mortgage. When a tax deed is issued, it wipes out the mortgage lender's lien entirely. That means both you and your mortgage company lose. Your lender won't protect you from a tax sale — and if the tax certificate holder gets a deed, your mortgage lender may still pursue you for the remaining balance. Selling for cash now lets you pay off both the taxes and the mortgage cleanly.
What Delinquent Taxes Really Cost You in Indiana
The tax bill itself is only the starting point. Penalties, fees, and lost exemptions compound quickly:
Local Property Tax Rates & Tax Sale Schedules
Clark, Floyd, Harrison, Scott, and Washington counties all conduct annual tax sales, typically in the fall. Here are the approximate property tax rates and what that means for a $150,000 assessed home:
Your Options for Selling a House with Tax Liens
Most traditional buyers use mortgage financing — and their lender will not approve a loan on a property with outstanding tax liens. That means you'd need to pay off the taxes before closing (money you may not have) or hope the title company can arrange payoff from proceeds with the buyer's lender cooperating. A cash buyer skips all of this. We purchase the property directly, the title company pays the tax liens and any certificates from the sale proceeds, and you walk away clean. No lender approval needed, no delays, no deal falling apart at the last minute.
How We Buy Houses with Tax Liens
- Call us at (502) 528-7273 — tell us about your property and your tax situation. How many years behind, any certificates sold, any notices received. Completely confidential.
- We research the liens — we pull the tax records from your county auditor's office to determine exactly what's owed, including penalties and any outstanding tax certificates.
- Cash offer in 24 hours — we present a fair offer that accounts for paying off all tax liens at closing. You see a clear breakdown of what you'll walk away with.
- Title company handles payoff — our title company works directly with the county and any tax certificate holders to clear all liens at closing. You don't need to contact anyone.
- Close in 7-14 days — you get cash, the taxes get paid, the title transfers clean. No more tax sale threats, no more penalties accumulating.
Yes. As long as you're still within the 1-year redemption period, you own the property and can sell it. The title company will pay off the tax certificate holder (including their penalties and costs) from the sale proceeds at closing. Even if you're close to the end of the redemption period, we can close fast enough to beat the deadline. If the redemption period has already expired but no tax deed has been issued yet, contact us immediately — there may still be options, but time is critical.
Areas We Serve
- New Albany, Jeffersonville, Clarksville
- Charlestown, Scottsburg, Salem
- Corydon, Madison, Seymour
- All of Clark, Floyd, Harrison, Scott, and Washington counties
Frequently Asked Questions
We buy houses at any stage of tax delinquency — one missed installment or five years behind. The sooner you act, the less you'll lose to penalties and the more equity you'll preserve. Don't wait until a tax certificate is sold or the redemption period is about to expire.
This happens, especially when multiple years of delinquent taxes with penalties stack up on top of a mortgage. We can evaluate whether a short sale with your mortgage lender makes sense. Since tax liens are senior to the mortgage, the taxes get paid first at closing regardless — the mortgage lender takes the remaining proceeds. In some cases, a short sale still beats the alternative of losing the property entirely at a tax sale.
They can — and many do. Once the 1-year redemption period expires under IC 6-1.1-25-4, the certificate holder can petition the court for a tax deed. If granted, they become the new owner and you lose all rights to the property. Tax sale investors in Clark, Floyd, and Harrison counties are active and experienced — they file these petitions routinely. Don't assume they'll wait or forget.
No — that's one of the biggest advantages of selling to a cash buyer. The title company pays all delinquent taxes, penalties, and tax certificate redemption amounts directly from the sale proceeds at closing. You don't need to come up with the money in advance. We handle properties with tax liens regularly and our title companies know exactly how to process these payoffs.
If you've moved out and the property is no longer your primary residence, you lose the homestead exemption — which in Indiana can reduce your assessed value by up to $45,000 (capped at 60% of assessed value). This means your tax bill could increase significantly, making the delinquency worse. If the property is already vacant, your tax burden may be higher than you realize. This is another reason to sell sooner rather than later.
Yes. Multiple years of delinquent taxes are common and we handle this regularly. The county can combine all delinquent years into a single tax sale. At closing, the title company pays off every year that's owed. The key is acting before the redemption period expires on the oldest certificate — once a tax deed is issued for any year, the new owner has a claim to the property.
Not exactly. A tax lien is created automatically when you fail to pay your property taxes — the county has a lien on your property for the unpaid amount. A tax sale is when the county auctions that lien to a third-party investor who pays your back taxes and receives a tax certificate. The lien exists from day one of delinquency; the sale happens later at the county's annual auction. Both create serious problems, but the tax sale starts the 1-year countdown to potentially losing your home.