A Tax Lien or Unpaid Property Taxes? We Buy As-Is, Liens and All

Selling a House With a Property Tax Lien

Falling behind on property taxes does not mean your house is stuck, and neither does a recorded tax lien. Whether the property has been declared tax-defaulted, a payment plan lapsed, or the IRS or a state tax agency has its own lien against you personally, each of those clears under a different set of rules and a different timeline. As-Is Home Buyer purchases houses directly for cash, as-is, and works through back taxes and liens as part of the purchase instead of requiring you to pay everything off first. If your search was "sell my house for cash los angeles", a tax lien does not take that option off the table.

This overview of California property-tax lien law is general information, not legal advice, and it is not a substitute for guidance from a licensed California attorney about your specific situation.

How Your Property Taxes Become Tax-Defaulted

California collects most secured property tax bills in two installments each year, and the second installment is due February 1 and becomes delinquent after 5 p.m. on April 10. If the full year's bill is still unpaid by June 30, the unpaid amount becomes tax-defaulted at 12:01 a.m. on July 1, automatically and by operation of law, under Revenue and Taxation Code section 3436. That default declaration is a different, earlier event than the county actually being able to sell the property, and the two get confused often. A single missed installment does not put a house on an auction list by itself. It starts a longer clock, and what happens on that clock is what actually determines how serious the situation is.

What a Tax Default Costs You Each Month

Once a property becomes tax-defaulted, the balance does not just sit there. Revenue and Taxation Code section 4103 adds a redemption penalty of 1 1/2 percent a month on the defaulted amount, starting July 1 of the default year, and the same penalty is added again each following July 1 on whatever is still unpaid. Under section 4102, redeeming the property also means paying a flat redemption fee on top of the taxes and penalties. The Los Angeles County Treasurer and Tax Collector's own guidance for secured property taxes puts the mechanic in plain terms: a $15 redemption fee gets added, and defaulted property taxes are subject to an additional penalty of 1.5% of the base tax per month. None of that is capped at a fixed dollar figure, so the amount owed generally keeps growing every month the balance goes unpaid.

The Five-Year Power to Sell

There is a real deadline behind all of this, and it is measured in years, not months. Under Revenue and Taxation Code section 3691, once property has been tax-defaulted for five years or more, the tax collector gets the power to sell it at public auction to recover the unpaid taxes, penalties, and costs. Reaching the five-year mark does not mean an auction happens automatically the next day, but it does mean the county now has the legal authority to schedule one. Treating the clock as something that resets or quietly goes away on its own is the mistake that tends to cost people real equity.

The Installment Plan of Redemption

California law also gives you a way to stop the clock without paying everything at once. Under Revenue and Taxation Code section 4217, a person can generally elect to pay delinquent taxes in installments any time before the tax collector's power to sell actually arises. Los Angeles County runs this as its Five-Pay Plan, available to residential and agricultural property in default less than five years, and to commercial or vacant residential property in default less than three years, per the county's own published guidance. Enrolling means staying current on the plan itself and on current-year taxes going forward; falling behind on a plan payment can put a property back where it started. It is a real option, not a guaranteed fix, and it does not erase the lien so much as spread the payoff out.

How a Tax Lien Gets Paid When the House Sells

A property tax lien is not treated like an ordinary debt when a house closes. Under Revenue and Taxation Code section 2187, every tax, penalty, and interest on real property is itself a lien against that property, and under section 2192.1, that lien has priority over other liens on the property regardless of when those other liens were recorded. In practice, that generally means escrow pays off delinquent property taxes, penalties, and the redemption fee first, ahead of a mortgage, a judgment, or an HOA assessment. If your title also carries a separate judgment or lien, know that we resolve a judgment or lien on a Los Angeles County house the same way, negotiating and resolving it in the same escrow, just behind the tax lien in the payout order.

IRS and State Tax Liens Are a Different Animal

A county property tax lien is not the same as a federal or state income-tax lien, even though people use "tax lien" for both. The IRS files a Notice of Federal Tax Lien when a federal tax debt goes unpaid, and that lien can attach to real and personal property. Paying the debt in full is generally the most direct way to clear it; the IRS states it releases the lien within 30 days of full payment. California's own state tax lien works differently: under Government Code section 7170, a state tax liability becomes a lien on all real and personal property a taxpayer owns in California. Getting a payoff figure and a release generally means contacting that agency directly, since neither lien clears through the county's property-tax system. If your title carries a different kind of lien entirely, the process to sell a house with unpaid HOA assessments, or to sell a house before the notice of default sale date, works the same way: we work it out through escrow rather than asking you to clear it first.

Selling As-Is With a Tax Lien Still on the Books

None of this needs to be untangled before you can sell. Selling as-is means the buyer takes the property in its current condition, tax situation included, and it does not erase any lien from title on its own. Whatever is owed, current-year taxes, a prior-year default, penalties, or a separate IRS or state lien, still has to be accounted for through escrow before the sale can close. Selling to a cash buyer generally sidesteps the retail-lender requirement to clear that balance before funding, since there is no financing contingency in the way. That holds whether the property sits in an unincorporated pocket of the county or in a city like Gardena (see sell your house fast gardena for how we buy there), it works the same way we buy anywhere else in the county. There is no fixed timeline; it depends on how long the taxes have been unpaid and whether other liens are layered on top. We do not charge sellers a fee, deposit, or inspection charge to buy a house with back taxes or a tax lien attached.

Common Property Tax Lien Questions

These FAQs about California property-tax lien law are general information, not legal advice; consult a licensed California attorney about your specific circumstances.