How Property Tax Liens Work in Indiana
Indiana delinquent property taxes follow a legal process set by Indiana Code IC 6-1.1-24 and IC 6-1.1-25. The county notice and the county auditor control the dates for a specific parcel:
Under Indiana law, the property tax lien is superior to other liens, including a mortgage (IC 6-1.1-22-13), and a tax deed generally conveys the property free of those liens. Do not assume your servicer will pay the taxes. Some do and add the amount to the loan, which creates its own problems. If a tax deed wipes out the mortgage lien, the loan debt itself may still be owed. Ask the servicer and an attorney.
What Delinquent Taxes Can Cost in Indiana
The tax bill is only the starting point. Penalties, redemption amounts, and lost homestead relief can add up:
County Tax Sale Information
Each county auditor publishes its tax sale date and list, and the Indiana Department of Local Government Finance posts county tax rates. Check your county's official pages for the current year rather than relying on a summary.
Your Options for Selling a House with Tax Liens
In either kind of sale, the title company typically pays delinquent taxes and any certificate redemption from the seller's proceeds at closing. A direct buyer may not need loan approval or an appraisal, which can matter when a redemption deadline is close, but title, payoff, and deadline requirements still apply.
Federal Tax Liens Are Different
An IRS federal tax lien is separate from county property taxes. If one is recorded against the property, the IRS may need to be paid from proceeds or issue a certificate of discharge. The IRS asks that discharge applications (Form 14135, Publication 783) be filed at least 45 days before closing. Speak with a tax professional early.
How We Review Houses with Tax Liens
- Call us at (502) 528-7273 — tell us about the property and the tax situation: how many years behind, any certificates sold, any notices received.
- We research the liens — we review the county auditor and treasurer records to estimate what is owed, including penalties and any outstanding certificate.
- Written offer after review — any offer follows review of the property, tax-sale status, redemption deadline, title, payoff, and closing requirements.
- Title company handles payoff — the title company requests payoff figures from the county and handles payment at closing; you should still confirm deadlines with the auditor.
- Closing timing — the date depends on ownership, title, payoffs, liens, signatures, and any lender or court requirements.
Generally, yes. During the redemption period you still own the property and can sell it; the title company pays the redemption amount from the sale proceeds at closing. If the deadline is close, get the exact redemption amount and date from the county auditor right away. No buyer can guarantee a closing before the deadline. If the redemption period has expired, contact the county auditor and an Indiana attorney immediately to learn whether any option remains.
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
Roger can review a property at any stage of delinquency. Acting earlier generally means fewer penalties and more time before any redemption deadline.
Because the property tax lien is superior to the mortgage, delinquent taxes are paid first at closing. If the remaining proceeds will not cover the mortgage and closing requirements, a short sale needs the lender's written approval. Ask the servicer and an attorney about deficiency treatment.
After the redemption period, the purchaser may petition the court for a tax deed after giving the required notices (IC 6-1.1-25-4). Do not assume the purchaser will wait.
Usually not in advance. The title company typically pays delinquent taxes, penalties, and any certificate redemption amount from the sale proceeds at closing, whether the buyer pays cash or uses a loan. The sale has to net enough to cover them.
If the property is no longer your principal residence, it loses Indiana's homestead deductions and homestead credit, and it moves to a higher property-tax cap. SEA 1 (2025) is phasing the standard deduction down from $48,000 (taxes payable 2026) to zero while expanding other homestead relief, so ask the county auditor for the current figures for your parcel (DLGF memo).
Yes. Every delinquent year owed is generally included in the amount for the tax sale, and at closing the title company pays what is owed. The controlling date is the redemption deadline on the certificate. Confirm it with the auditor.
Not exactly. Indiana's property-tax lien attaches to the parcel on the assessment date for each tax year and is superior to other liens. A tax sale happens later, if taxes stay delinquent: a bidder pays the minimum bid and receives a certificate of sale, which starts the redemption period.
Related Resources
- Sell a House with Tax Liens in Kentucky
- Sell a House in Foreclosure in Indiana
- Behind on Mortgage Payments in Indiana
- Sell a Vacant House in Indiana
- How Much Do Cash Home Buyers Pay?
General information only; not legal or tax advice. Tax-sale law changes often; confirm amounts and deadlines with the county auditor and an Indiana attorney.