How to Sell a House With Back Taxes in Michigan

If you own a house in Michigan with unpaid property taxes, you may still be able to sell the property before tax foreclosure is completed. In many cases, delinquent taxes can be paid from the sale proceeds at closing rather than requiring you to pay the entire balance out of pocket beforehand.

The important thing is timing. Michigan has a structured property-tax delinquency, forfeiture, and foreclosure process, and the longer unpaid taxes remain unresolved, the fewer options a homeowner may have.

This guide explains how to sell a house with back taxes in Michigan, what happens to delinquent property taxes at closing, how Michigan’s tax foreclosure process works, and what homeowners should consider before deciding how to sell.

Can You Sell a House With Back Taxes in Michigan?

Yes. In many situations, a Michigan homeowner can sell a property even when property taxes are delinquent.

The unpaid taxes generally need to be satisfied as part of the transaction so the buyer can receive clear title. A title company can identify the amount owed and arrange for the delinquent taxes, applicable interest, fees, liens, and other required charges to be paid from the seller’s proceeds at closing.

If the property is worth more than the total amount owed against it, the homeowner may still receive the remaining proceeds after taxes, mortgages, liens, closing costs, and other obligations are paid.

What Are Back Property Taxes?

Back property taxes are real estate taxes that were not paid by their due date.

Once property taxes become delinquent, additional interest, administrative fees, and other charges can be added. The amount owed can increase over time if the delinquency is not resolved.

In Michigan, delinquent real property taxes are generally transferred to the county treasurer for collection.

How Does Michigan’s Property Tax Foreclosure Process Work?

Michigan uses a multi-year process for delinquent real property taxes.

According to the Michigan Department of Treasury, unpaid taxes from the previous year are generally returned to the county treasurer as delinquent on March 1. Additional fees and interest begin to accrue, and notices are sent to the taxpayer or property owner.

If the taxes remain unpaid into the second year of delinquency, the property may be forfeited to the county treasurer. Forfeiture does not immediately mean the homeowner has lost ownership of the property, but additional fees and redemption requirements apply.

If the delinquency continues into the third year, the property can move into foreclosure proceedings. Michigan generally provides a deadline for redeeming the property before foreclosure becomes final.

What Does Property Tax Forfeiture Mean in Michigan?

Property tax forfeiture is an important stage in Michigan’s delinquent-tax process.

A forfeited property has not necessarily been permanently lost by the owner. Instead, forfeiture allows the county treasurer or other foreclosing governmental unit to begin additional procedures leading toward foreclosure if the delinquent taxes are not paid.

At this stage, additional fees, interest, recording costs, and notice-related expenses may be added to the amount needed to redeem the property.

When Can a House Be Foreclosed for Back Taxes in Michigan?

Michigan generally uses a three-year property-tax delinquency and foreclosure timeline.

If real property taxes remain unpaid through the required deadlines, the foreclosing governmental unit can obtain a foreclosure judgment. Redemption rights generally expire at the end of the statutory redemption period.

Because the exact dates matter, homeowners should rely on the notices sent by the county treasurer or foreclosing governmental unit rather than assuming they have a certain amount of time.

Can You Sell Before Property Tax Foreclosure Is Completed?

In many cases, yes.

If the owner still has the legal right to sell the property and there is enough time to complete the transaction, a sale may be possible before the tax foreclosure becomes final.

The title company will usually need to confirm the delinquent tax amount, obtain any necessary payoff or redemption figures, and make sure the taxes can be satisfied at closing.

The closer the property gets to the final foreclosure deadline, the more difficult it may become to complete a sale in time.

What Happens to Back Taxes When You Sell?

Delinquent property taxes generally do not disappear simply because the property is sold.

Instead, the title company typically identifies the amount owed and pays the delinquent taxes from the sale proceeds as part of the closing process.

For example, suppose a house sells for $180,000 and there are $8,000 in delinquent property taxes. If there is also a $100,000 mortgage and additional closing costs, those obligations would generally be paid from the sale proceeds before the remaining funds are distributed to the seller.

The exact amount owed should be confirmed through the county treasurer and title company before closing.

Can You Sell If You Cannot Afford to Pay the Back Taxes Upfront?

Potentially, yes.

A homeowner does not always have to personally pay the entire delinquent tax balance before listing or agreeing to sell the property.

If the sale generates enough proceeds, the delinquent taxes may be paid directly through closing. This can be useful for homeowners who have equity in the property but do not have enough cash available to cure the tax delinquency themselves.

What If the Back Taxes Are More Than the Equity in the House?

If the mortgage, delinquent taxes, liens, and other closing obligations exceed the likely sale price, completing a standard sale can become more complicated.

In that situation, homeowners should first determine the approximate market value of the property and compare it with the total amount needed to clear title.

Possible next steps may include speaking with the county treasurer, reviewing payment or redemption options, consulting a real estate attorney, or discussing the situation with the mortgage lender if a mortgage is also involved.

Can You Sell a House With a Property Tax Lien?

Yes, a property with a tax lien can often still be sold, but the lien generally must be addressed before or during closing.

A title company can search the public records to identify liens affecting the property. The amount required to satisfy those liens is normally included in the closing process so the buyer can receive clear title.

Additional liens, such as mortgages, judgments, municipal charges, or unpaid utility assessments, can also affect the amount the seller ultimately receives.

Selling Traditionally vs. Selling As-Is With Back Taxes

A homeowner with delinquent property taxes may have more than one way to sell.

Traditional Listing

Listing the property with a real estate agent may make sense when the home is in good condition, there is enough time before any foreclosure deadline, and the owner wants maximum exposure to retail buyers.

A traditional sale may involve preparing the property, showings, inspections, repairs, appraisal, buyer financing, and a longer closing process.

Selling As-Is

An as-is sale may be worth considering when the house needs repairs, the homeowner does not want to spend additional money preparing the property, or the delinquent-tax timeline makes speed more important.

Selling as-is generally means the seller is not agreeing to complete repairs simply to close the transaction.

For more information, read our guide on how to sell a house as-is in Michigan.

What If You Are Also Behind on Mortgage Payments?

Some homeowners facing delinquent property taxes are also behind on their mortgage.

If both issues exist, the title company may need to obtain a mortgage payoff along with the delinquent property-tax amount. The sale proceeds would then be used to satisfy both obligations, along with any other liens or required closing expenses.

If mortgage foreclosure has already started, timing becomes even more important.

Read our guide on how to sell a house in foreclosure in Michigan for more information about that process.

What Should You Do If You Receive a Tax Foreclosure Notice?

Do not ignore it.

A tax foreclosure notice should include important information about the property, the amount owed, upcoming hearings or deadlines, and the steps required to redeem the property.

Homeowners should contact the county treasurer or the applicable foreclosing governmental unit as soon as possible to confirm the current balance and deadline.

If selling is being considered, the homeowner should also contact a title company, real estate professional, attorney, or potential buyer early enough to determine whether a transaction can be completed before the deadline.

Can You Set Up a Payment Plan for Delinquent Property Taxes?

Payment and hardship options can vary by county and individual circumstances.

Some county treasurers may offer payment arrangements or other assistance programs for qualifying homeowners. The availability and terms of those programs are not the same in every county.

The best starting point is to contact the county treasurer directly and ask what options are available for the specific property.

Selling a House With Back Taxes in Metro Detroit

M&N Legacy works with homeowners throughout Metro Detroit and surrounding Michigan communities who are considering selling properties as-is.

We serve homeowners in communities including Detroit, Dearborn, Dearborn Heights, Livonia, Westland, Taylor, Redford, Allen Park, Lincoln Park, Southgate, Wyandotte, Garden City, Inkster, Wayne, Romulus, Trenton, and Riverview.

If your property has delinquent taxes, needs repairs, has been inherited, is facing foreclosure, or you simply want to understand your selling options, you can contact M&N Legacy to discuss the property.

Frequently Asked Questions About Selling a House With Back Taxes in Michigan

Can I sell my house if I owe property taxes in Michigan?

Yes. In many situations, delinquent property taxes can be paid from the sale proceeds at closing so the buyer can receive clear title.

Do I have to pay the back taxes before I sell?

Not always. If the property has enough equity, the delinquent tax balance may be paid directly through the closing rather than requiring the homeowner to pay the entire amount upfront.

How long before unpaid property taxes lead to foreclosure in Michigan?

Michigan generally uses a multi-year delinquency, forfeiture, and foreclosure process. The exact deadlines depend on the tax year and the notices issued for the property, so homeowners should confirm the specific dates with the county treasurer.

Can I sell after the property has been forfeited?

Potentially. Forfeiture is not always the same as final foreclosure. A homeowner may still have redemption rights and may be able to sell before those rights expire, depending on the timing and circumstances.

Can back taxes be paid at closing?

Yes. A title company can generally arrange for delinquent property taxes and other liens to be satisfied from the sale proceeds when enough funds are available.

What happens if I owe more than the house is worth?

If the total mortgage balance, delinquent taxes, liens, and closing obligations exceed the property’s value, a normal sale may not provide enough money to clear title. Homeowners should review the numbers carefully and consider professional legal or financial guidance.

Related Michigan Seller Guides

Talk With M&N Legacy About Your Michigan Property

If you have delinquent property taxes and are considering selling, finding out exactly what is owed and how much time remains should be your first step.

M&N Legacy buys properties throughout Michigan, including houses that need repairs or are being sold as-is. We can review the basic details of the property and explain whether a direct sale may be an option for your situation.

Contact M&N Legacy to tell us about your property and discuss your options. There is no obligation to move forward with a sale.

For more Michigan homeowner resources and selling options, visit our Michigan home selling page.

This article is for general informational purposes and is not legal, tax, or financial advice. Property-tax foreclosure deadlines and rights can vary by property and circumstance. Homeowners should confirm their specific balance and deadlines with the county treasurer or applicable foreclosing governmental unit and consider speaking with an attorney, tax professional, or other qualified adviser when appropriate.