Behind on property taxes, or staring at a recorded IRS or state tax lien on your home? You are not stuck. You can sell a Los Angeles house with a tax lien on it, and you can do it without bringing any money out of your own pocket to make it happen. It does not matter much whether the lien is back property taxes owed to LA County, a federal tax lien the IRS recorded, or a state tax lien from the Franchise Tax Board. The path is the same in spirit: the lien gets paid, redeemed, or formally discharged out of the sale proceeds so title clears and the deal closes. The catch is that a tax lien is not a debt you can simply negotiate away the way you can a credit-card judgment. There is a specific government process behind each one, and most buyers and even most agents have no idea how to run it. We do. We bring a real cash offer and we handle the IRS discharge, the county redemption figure, and the FTB payoff ourselves so the tax lien comes off at the closing table.
Maybe you owe more in taxes than the house is worth. Maybe you are also behind on the mortgage and a foreclosure date is creeping up. Maybe the county already mailed you something about a “power to sell.” None of that ends the conversation. Tell us what is recorded against the property and roughly what you owe, and we will tell you straight what is possible.
Can You Sell a House With a Tax Lien on It?
Yes. You can sell a Los Angeles house with one tax lien, or with a tax lien stacked behind a mortgage and other claims. People assume a tax lien freezes the property and that the only way out is to write the government a large check first. That is not how it works.
What a tax lien actually does is attach to the property and demand that it be satisfied before clean title can pass. There are three ways that happens, and which one applies depends on who recorded the lien:
Payoff at closing. For most tax liens, the simplest route is that the full balance, or a negotiated payoff, is paid directly to the taxing agency out of the sale proceeds at the closing table. Escrow wires the money, the agency records its release, and title clears. You never touch that money and you never bring it from your own funds.
IRS certificate of discharge. A federal tax lien is different. When the IRS has recorded a lien, the property cannot simply be paid off at random; the IRS has to formally release that specific parcel from the lien so it can be sold. That is done through a certificate of discharge, and applying for it is paperwork most people have never seen. We file it.
County redemption. Delinquent property taxes are cured by paying the redemption amount to the LA County Treasurer and Tax Collector, which is the past-due tax plus penalties and interest. We get that exact figure and fold it into escrow.
The place this gets hard is when the taxes plus the mortgage and any other liens add up to more than the house will sell for, or when there is a deadline bearing down. That is exactly the work most “we buy houses” outfits and most agents will not touch. A cash buyer who just wants clean title handed over walks the moment the IRS is in the picture. We stay at the table and run the government process. That is the whole job, and it is the difference between a sale that closes and one that collapses.
What Kinds of Tax Liens End Up on Your Los Angeles Home?
There are three taxing authorities that can put a lien on a Los Angeles property, and each one works differently. If you are trying to sell a house owing back taxes, these are what show up on LA title reports.
Tap any type below to see how it lands on your title and how we handle it.
County property tax lien (LA County Treasurer and Tax Collector)
When you fall behind on your annual property taxes, the lien is the tax itself, and it is the most powerful lien there is. A property tax lien is super-priority: it jumps ahead of your mortgage and almost every other recorded claim, no matter when it was recorded. You cure it by paying the redemption amount to the LA County Treasurer and Tax Collector, which is the delinquent tax plus a redemption penalty that accrues at 1.5% per month (18% a year) on the unpaid balance. After five years of default, the Tax Collector gets the power to sell the home at a tax-defaulted property auction, which is the part you do not want to wait out. We pull the exact redemption figure from the county and pay it through escrow so the lien clears at closing.
IRS federal tax lien (Notice of Federal Tax Lien)
When you owe federal income taxes the IRS has not been paid, the IRS records a Notice of Federal Tax Lien, and it attaches to everything you own, including your home. To sell, you cannot just pay it off at the closing table the way you would a normal lien; the IRS has to formally release the property from the lien. That is done with a certificate of discharge, which we apply for using IRS Form 14135. The IRS grants the discharge when it is paid from the sale proceeds, or, when senior liens leave no equity for the government, under its no-equity rules even if it gets nothing. If a refinance or a small carve-out is the better route, Form 14134 requests a subordination instead. We file the application roughly 45 days before closing because the IRS targets about 30 days to process it, and we work the timeline so the discharge is in hand when escrow needs it.
California state tax lien (FTB or CDTFA)
California state income tax you owe goes to the Franchise Tax Board (FTB), and unpaid sales or use tax goes to the California Department of Tax and Fee Administration (CDTFA). Either agency can record a state tax lien with the county, and once it is on title it has to be cleared before the property transfers. The FTB issues a payoff demand or a partial release so escrow can pay the balance from proceeds and the lien comes off. These tend to be the most straightforward of the three to clear once we get the demand in writing. We request the payoff, confirm the number, and coordinate the release with title and escrow.
How We Clear Your Tax Lien and Close — Our Process
Here is the difference that matters, and it is exactly where the typical tax-resolution firm and attorney pages on this topic stop and we keep going. Those pages explain the law, hand you a form number, and then send you off to find a buyer, run the IRS application, and pull the whole thing together on your own. We do the opposite. We bring the offer and we file the agency paperwork. One phone call, one team that actually clears the lien and closes the sale.
- We pull title and identify every tax lien and its exact payoff, redemption, or discharge path. We get the title report, find every recorded tax lien, and figure out for each one whether it clears by payoff, by county redemption, or by IRS discharge. You cannot fix a number you do not know, so this comes first.
- We file the agency paperwork for each lien. For the IRS, we prepare and submit Form 14135 for a certificate of discharge (or Form 14134 for a subordination if that is the better fit). For the county, we get the exact redemption figure from the LA County Tax Collector. For the FTB, we request the payoff demand. This is the work most buyers and agents will not do, and it is what we specialize in.
- We coordinate with title and escrow. We line up every payoff demand, redemption figure, and discharge so the title company is working from the same numbers and nothing falls out of the file at the last minute.
- The taxes are paid, redeemed, or discharged at closing from the proceeds. Escrow pays the county redemption and the FTB payoff and satisfies the IRS under the discharge, each agency records its release, title clears, and the buyer takes the home free of the tax liens.
- You pay nothing, and there is no upfront fee. Everything is resolved out of the sale proceeds. You do not bring money to closing to make this happen, and we never charge you any upfront fee.
What If the Tax Liens Are More Than the House Is Worth?
Sometimes the mortgage plus the tax liens and any other claims add up to more than the house will sell for. When that happens, the path is a short sale paired with a tax-lien discharge, and the good news is the IRS has a built-in answer for exactly this situation.
On the mortgage side, the lender agrees to accept less than the full balance and release its lien so the property can transfer. On the IRS side, the no-equity discharge rules let the IRS release the property from its federal tax lien when senior liens leave nothing for the government anyway. In plain terms, if the mortgage and the property taxes eat all the value, the IRS will very often discharge the lien so the sale can close even though it collects nothing from this property. The FTB has a similar partial-release path. We build the file to show each agency exactly where the money goes and why a discharge is the realistic outcome.
Two important cautions. First, the anti-deficiency rules protect you only on the mortgage, not on the tax debt. Under California law, purchase-money loans on your primary residence are generally protected under CCP § 580b, and CCP § 580e bars a deficiency on most approved residential short sales of one-to-four-unit properties. Second, and this is the part people get wrong: a discharge releases the property from the lien so the sale can close. It does not erase the underlying tax debt unless that debt is actually paid or settled with the agency. The tax you still owe is a separate question for you and your tax professional.
For the full walkthrough, see our California short sale process page, and for the bigger picture on every type of recorded claim, our sell a house with a lien in Los Angeles hub covers it all.
We are real estate and short sale professionals, not attorneys or tax advisors. How a discharge, redemption, or the underlying tax debt applies to your specific situation is a legal and tax question. We will tell you straight how we see the path, and we will point you to a CPA or tax attorney for the call that needs one.
What Are the Priority and Foreclosure Deadlines to Watch?
Timing and seniority decide how a tax-lien sale plays out. A few rules worth knowing:
Property-tax super-priority and the five-year clock. A county property tax lien sits ahead of your mortgage and almost everything else. More urgent is the deadline: after five years of default, the LA County Tax Collector gets the power to sell the home at a tax-defaulted property auction. Once that clock runs out, your options narrow fast, which is why a redemption-and-sale handled now beats waiting.
The IRS timeline. A certificate of discharge takes the IRS roughly 30 days to process once the application is complete, so we file Form 14135 about 45 days before the target closing. Start late and the discharge, not the buyer, becomes the thing holding up your sale. The earlier you call, the more runway we have.
The NOD window. If you are also behind on the mortgage and the lender records a Notice of Default, a 90-day clock starts before a Notice of Sale can be recorded. That window is your room to act. Our Notice of Default guide breaks down what to do at each stage, and if a sale date is already looming, read selling your house in foreclosure in Los Angeles.
AB 2424. California’s newer foreclosure law gives homeowners real leverage. Deliver a signed listing agreement to the servicer at least five business days before a scheduled trustee’s sale and the sale must be postponed at least 45 days. Follow with a purchase agreement and it postpones again, stacking to roughly 90 days or more of breathing room to get a sale done. We use this constantly. See our AB 2424 postponement page.
None of this is legal advice, and tax deadlines are unforgiving. The sooner you call, the more of these tools are still on the table.
Where We Work in Los Angeles
We help homeowners across the city and county, from the Westside to the Valley to the harbor. We regularly clear tax liens and run short sales in South LA, Highland Park, Boyle Heights, Inglewood and the cities around it, Koreatown and Downtown condos, the San Fernando Valley from Van Nuys to Northridge, the San Gabriel Valley, and the South Bay. Different submarket, same playbook: pull title, identify every tax lien, run the redemption or discharge, and close. Wherever the property sits in LA County, the Treasurer and Tax Collector, the IRS, and the FTB work the same way, and so do we.
Frequently Asked Questions
Can I sell my house with a tax lien on it in Los Angeles?
Yes. A tax lien is paid, redeemed, or formally discharged at closing out of the sale proceeds. The title company identifies every tax lien, we run the right process for each one, whether that is a county redemption, an FTB payoff, or an IRS certificate of discharge, and the lien comes off so the buyer takes clean title and the sale closes.
Can I sell a house with an IRS tax lien?
Yes. When the IRS has recorded a federal tax lien, you sell by getting the IRS to release that specific property from the lien through a certificate of discharge. We apply for it with IRS Form 14135. The IRS grants the discharge when it is paid from the proceeds, or under its no-equity rules when senior liens leave nothing for the government. The lien on the property is released so escrow can close.
Will the IRS let me sell my house, and what is a certificate of discharge?
In the great majority of cases, yes. A certificate of discharge is the IRS’s formal release of one specific property from a federal tax lien so it can be sold. We request it on Form 14135 and file it about 45 days before closing, since the IRS targets roughly 30 days to process the application. Once granted, the property is clear of the federal lien and the sale can close.
What is IRS Form 14135?
Form 14135 is the Application for Certificate of Discharge of Property From Federal Tax Lien. It is what you submit to ask the IRS to release a specific property from its lien so a sale can close. Form 14134 is the related application for subordination, which is used more often with a refinance. We prepare and file whichever one fits your situation.
What if I owe more in taxes than the house is worth?
That points to a short sale paired with a lien discharge. The mortgage lender agrees to accept less than the full balance, and the IRS will often grant a no-equity discharge when senior liens leave nothing for the government. The FTB has a similar partial-release path. Keep in mind a discharge releases the property so the sale can close; it does not by itself erase the underlying tax debt, which is a separate question for your tax professional.
Do back property taxes have to be paid at closing?
Yes. Delinquent county property taxes are super-priority and have to be cleared before title can pass, so escrow pays the redemption amount, the delinquent tax plus penalties and interest, out of the sale proceeds at closing. We get the exact redemption figure from the LA County Treasurer and Tax Collector and fold it into the escrow numbers.
How long does it take?
It depends on which liens are involved. A sale with only a county redemption or an FTB payoff can move quickly. A federal tax lien adds about 30 days for the IRS to process the discharge, which is why we file early. If a mortgage short sale is also involved it takes longer because of the lender’s approval steps, and if a trustee’s sale is scheduled, California’s AB 2424 can postpone it to give us time to close.
Do I pay anything?
No. You pay nothing out of pocket. The taxes are paid, redeemed, or discharged from the sale proceeds, and we never charge you any upfront fee.
Call Us Today
You do not have to figure out the IRS, the county, the FTB, the lender, and the deadline on your own. Tell us what is recorded against your house and roughly what you owe, and we will tell you straight what is possible.
Call or Text Us Today(424) 239-5209 — no upfront fees, ever
Why Work With Us
We Sell Houses LA is run by Nick Hedberg, a working short sale processor with Beverly & Company who deals with the IRS, the LA County Tax Collector, the Franchise Tax Board, mortgage lenders, and title companies, and clears tax liens at closing. That is the part most “we buy houses” companies, and even most tax-resolution firms and attorneys who write about this, will not do. They explain the law. We bring a real offer and we do the discharge applications, the redemption, the loss mitigation, and the lien releases ourselves.
A homeowner near Van Nuys came to us with a recorded federal tax lien and three years of back property taxes, and almost no equity once the mortgage was counted. We pulled title, filed Form 14135, and worked the no-equity discharge with the IRS while we coordinated the county redemption through escrow. The discharge came through, the back taxes were paid from proceeds at closing, and the sale closed clean, with no money out of his pocket.
What clients say — verified 5.0 rating on Zillow
Nick was straight up awesome! The whole process was rather easy & worry free, from getting the house ready to show to negotiations with potential buyers. Once the house went into escrow (over asking price!), the whole escrow process was quick.— Dean S., sold his home in Venice (Zillow)
Nick is a great real estate agent. He is extremely knowledgeable and stuck by me trying to navigate this crazy market. I was glad to have him represent me when it came time to negotiate. If you want a professional and hard working agent, do not hesitate to work with Nick.— Alexander M. (Zillow)
I can’t recommend Nick highly enough. He is incredibly knowledgeable about the real estate market, never pressured me, and always had my best interests at heart. His professionalism and positive attitude were refreshing.— Shayan M., Los Angeles (Zillow)
Have questions or ready to start? Contact us, or head back to our Los Angeles short sale agent hub for the full picture. If your lien is from a lawsuit rather than taxes, see our page on how to sell a house with a judgment lien in Los Angeles.
We Sell Houses LA · Los Angeles, CA · (424) 239-5209 · info@WeSellHousesLA.com. Real estate and short sale services provided by Nicholas Hedberg, DRE #02016456, Beverly & Company, DRE #02078273. We never charge any upfront fee. This page is general information about selling property with a tax lien in California and is not legal or tax advice; consult a qualified attorney or tax professional, such as a CPA or tax attorney, about your specific situation. Updated June 2026.
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