Types of Tax Liens on Property

• Property tax liens — Filed by the county for unpaid property taxes. Florida counties can sell tax certificates after 2 years of non-payment.
• Federal tax liens (IRS) — Filed by the IRS for unpaid federal income taxes. Attaches to all property you own.
• State tax liens — Filed by the Florida Department of Revenue for unpaid state taxes.

How Liens Are Handled at Closing

The title company conducts a title search before closing and identifies all liens on the property. At closing, liens are paid off from the sale proceeds in priority order before any funds are distributed to you. You receive whatever remains after the mortgage and all liens are satisfied.

What If the Liens Exceed the Sale Price?

If the total of all liens and the mortgage exceeds the sale price, you're in a negative equity situation. Options include:

• Negotiate with lienholders — The IRS and other lienholders sometimes accept less than the full amount (called a "discharge" or "subordination") to allow a sale to proceed
• Short sale — Negotiate with the mortgage lender to accept less than the full balance
• Consult a tax attorney — A tax attorney can negotiate with the IRS on your behalf

IRS Liens: What You Need to Know

An IRS federal tax lien attaches to all property you own. To sell, you need either:

• A payoff from the sale proceeds (if there's enough equity)
• An IRS "discharge of property from federal tax lien" — which removes the lien from a specific property to allow the sale
• An IRS "subordination" — which allows the mortgage lender to be paid first

The IRS discharge process typically takes 30–45 days. Plan ahead if you have an IRS lien.

Cash Buyers and Tax Liens

Cash buyers are experienced with tax lien situations. They understand the payoff process and can work with your timeline, including the IRS discharge process if needed.