Table of Contents
By LandyDandy
Every parcel has a tax bill, even cheap raw land. If taxes go unpaid, the county can put a lien on the land and, in time, sell it. Before you buy, check the tax status yourself and agree in writing on who pays what.
General information, not legal, tax or financial advice. Rules differ by state and county and change over time. LandyDandy is a land marketplace, not a law firm, lender or title company. Each seller on LandyDandy sets their own terms. Before you sign or pay anything, check with the county and a licensed real estate attorney or title company in the state where the land is.
The short answer
- Look up the parcel at the county treasurer or tax collector. Many counties show the bill and any past-due years online.
- In many states, unpaid property taxes are a lien on the land itself. If you buy land with back taxes, they can become your problem.
- On an owner-financed deal, put in writing who pays the taxes each year and how you can check they were paid.
- Tax-sale land can be cheap, but the title may have problems that take time and money to fix.
- Rules on tax liens, tax deeds and redemption differ a lot by state.
How to check a parcel's taxes
- Get the parcel ID (APN or PIN) from the listing or the county GIS map.
- Find the county office that collects property tax. Its name varies by state, for example treasurer or tax collector.
- Search by parcel ID. Note the yearly tax amount, the last year paid and any amount past due.
- Check the assessor's record too. It shows the assessed value, the land use code and any exemption on the parcel.
- If anything is unclear, call the office. Ask: "Are there any unpaid taxes, liens or pending tax sales on this parcel?"
The tax amount on cheap rural land is often small. But past-due years can add interest, penalties and fees. Ask for a payoff figure good through a set date.
Back taxes on a listing: who pays
If the seller owes back taxes, settle it before or at closing. Common ways:
- The seller pays them off before closing.
- The title company or closing attorney pays them from the sale money at closing.
- The price is lowered and you pay them. Only do this with a written payoff amount from the county.
Current-year taxes are often split between buyer and seller by date. This is called proration. Your purchase agreement should say how it works.
If you buy without a title company, check the tax status again right before you pay. Then get a receipt or a printout that shows the taxes are current.
Owner financing: who pays taxes while you make payments
On many owner-financed land deals, you make monthly payments for years. The question is who pays the tax bill in the meantime.
- Some contracts make the buyer pay the county directly.
- Some have the seller pay and add the cost to your monthly payment.
The CFPB warns about a risk in contract-for-deed deals (it writes about homes, but land sellers use the same structure): a seller may take your money for taxes and insurance but not pay them. When you finally own the property, you face large bills and penalties [S1]. To protect yourself:
- Get the tax arrangement in writing.
- Look up the parcel online at least once a year to confirm taxes are paid.
- Ask that tax notices go to you, or that the seller sends you proof of payment.
Under a contract for deed, the seller keeps legal title until you make all the payments [S1]. So unpaid taxes on the seller's side can still threaten land you have been paying for.
Tax liens vs tax deeds
When taxes go unpaid, states handle it in different ways. Two broad models are common, and some states mix them.
Tax lien sales. The county sells a lien certificate to an investor. The investor pays the tax and earns interest. The owner can pay it off within a set time, called the redemption period. Its length varies by state. If the owner does not redeem, the lien holder may be able to start a process to get the land.
Tax deed sales. The county sells the land itself at auction. Some states still give the old owner a period to redeem after the sale. Others do not.
The details differ by state and sometimes by county. Read your state's tax sale rules and talk to a local attorney before you bid.
In 2023, the U.S. Supreme Court decided Tyler v. Hennepin County. A county had sold a condo for $40,000 to cover about $15,000 in unpaid taxes, interest and penalties, and kept the $25,000 extra. The Court ruled that the owner plausibly claimed this violated the Takings Clause of the Constitution [S22]. Rules on what happens to surplus money can differ by state, so check current local rules.
Buying at a tax sale: the risks
Tax-sale land can look like a bargain. Know the risks first:
- Title problems. A tax deed may not clear every old claim. A title company may not insure it until a court action, often called a quiet title action, is done. That costs money and time.
- Redemption. In some states the old owner can still redeem after the sale. You may get your money back with interest, but not the land.
- No inspection. You often cannot walk the land before the auction.
- Bad land. Some parcels go to tax sale because nobody wants them. They may be landlocked, swampy or unbuildable.
- Other liens. A tax sale may not wipe out every other lien. Ask a title company what survives in your state.
It is common for a seller to buy land at a tax sale and list it for resale. Ask the seller how they got title, whether a quiet title was done, and whether a title company will insure it.
Exemptions and rollback taxes
Many states lower taxes for land used for farming or timber, and many have a homestead exemption for a primary home. These depend on state law and are usually run by the county assessor.
Two things to check:
- Does the exemption stay? Some exemptions end when the land is sold or the use changes. The new owner may need to apply again.
- Back taxes when the use changes. Ask the assessor whether the parcel is in a farm or timber program, and whether leaving it would trigger back taxes. Some states call these rollback taxes.
A low tax bill on the listing may depend on an exemption you will not get.
Frequently asked questions
How do I find out if a piece of land has unpaid taxes?
Search the parcel ID on the county treasurer or tax collector website, or call the office. Ask whether there are unpaid taxes, liens or a pending tax sale, and get a payoff amount in writing.
If I buy land with back taxes, do I have to pay them?
In many states, unpaid property taxes are a lien on the land, so they can become the new owner's problem. That is why back taxes are normally paid off before or at closing. Put who pays them in the purchase agreement.
What is the difference between a tax lien and a tax deed?
With a tax lien sale, an investor buys the right to collect the unpaid tax plus interest, and the owner can still pay it off for a time. With a tax deed sale, the county sells the land itself. Each state uses its own system and rules.
Is it safe to buy land that came from a tax sale?
It can be, but check the title. A tax deed may not clear every old claim, and a title company may not insure it until a court action called quiet title is complete. Ask the seller how title was cleared.
On an owner-financed deal, who pays the property taxes?
Whoever the contract says. Some contracts make the buyer pay the county, others have the seller pay. Get it in writing and check the county's records yearly to confirm the taxes were paid.
Next steps on LandyDandy
Many listings on LandyDandy offer owner financing, and each seller sets their own terms. Before you message a seller, look up the parcel's tax status yourself, then ask how taxes are handled during the payment plan. Browse owner-financed land or start with a state like Arkansas or Texas. See also how owner financing works for land. Before you sign or bid, talk to a local real estate attorney or title company and the county tax office.
Sources
- [S1] Consumer Financial Protection Bureau — What is a contract for deed? — https://www.consumerfinance.gov/ask-cfpb/what-is-a-contract-for-deed-en-2149/ — seller keeps legal title until all payments are made; risk that the seller takes tax and insurance money and does not pay it.
- [S22] Cornell Law School LII — Tyler v. Hennepin County (2023) — https://www.law.cornell.edu/supremecourt/text/22-166 — $40,000 sale for about $15,000 tax debt; county kept $25,000; owner plausibly alleged a Takings Clause violation.