I Inherited a House With Back Taxes. What Do I Do?

Inheriting a house can come with a lot of questions, especially when you discover the property has delinquent property taxes.

So, what do you do if you’ve inherited a house with back taxes?

The first thing is simple: find out exactly how much is owed and where the property stands in the tax process.

I’m Brad, the Probate House Guy. I’m an active real estate investor and a licensed real estate agent in Georgia. Over the last 10 years, I’ve helped more than 300 sellers sell their properties, whether through a cash sale or by listing the property traditionally.

I’ve learned a thing or two about probate and inherited properties, and I’m sharing that knowledge here.

Of course, I’m not an attorney, so this isn’t legal advice. If you’re dealing with a specific probate or property tax situation, I always recommend talking with a probate attorney or real estate attorney about your circumstances. Pasted markdown

How to Find Out How Much You Owe in Property Taxes

Before you do anything else, figure out how much is owed on the inherited property.

Here in Georgia, that’s generally pretty easy to check. Go to the county tax commissioner’s website for the county where the property is located.

You’re looking for something like:

• Property taxes
• Search property tax bills
• Pay property taxes
• Search tax bills

Different counties may use different platforms, but the basic process is usually similar. Search for the property by address and pull up the most recent tax bill.

If the property is a couple of years behind, you should be able to see exactly how much is owed.

But there’s another thing you need to watch for.

Don’t Forget About City Property Taxes

If the inherited house is located inside a city, there may be both county and city property taxes.

I actually made this mistake myself.

We had a property in Alpharetta that we’d owned for about a year. I paid the Fulton County property taxes but completely forgot that the property was also within the city limits of Alpharetta.

That meant there was another tax bill from the city.

In my case, it was another $800.

The funny thing was, we never received the Alpharetta tax bill in the mail. Fulton County sent its bill to the mailing address on the tax records, but the City of Alpharetta sent its bill to the property itself.

I didn’t get mail at that property, so I had no idea there was another bill.

Eventually, the city contacted us and said we were delinquent and that they were going to file a tax lien on the property.

I went online, paid it, and everything was taken care of.

So, if you’ve inherited a house, don’t assume that paying the county property taxes means you’re completely caught up. Check to see whether there are also city taxes owed.

What Happens When Property Taxes Become Delinquent?

Now, let’s say you’ve checked and the taxes are behind.

What happens next?

In Georgia, the county can ultimately sell the tax lien associated with the unpaid property taxes so the county can recover the money it wasn’t paid.

Before that happens, there are public notices.

You can check your local county publication or search a website such as Georgia Public Notice to see whether a public notice has been filed.

If a notice has been filed, it can tell you that the tax lien is scheduled to be sold at an auction.

For example, let’s say there are $5,000 in delinquent property taxes.

The tax lien could be advertised for sale for that amount.

How a Georgia Tax Lien Auction Works

At the auction, investors—or other people with cash—can bid on the tax lien.

Let’s say that $5,000 tax lien gets bid all the way up to $50,000.

The person who wins the auction pays the $50,000 and then has to wait.

They don’t immediately get the house.

The homeowner has a one-year redemption period to redeem the property.

That means the homeowner can potentially get the property back by paying the required redemption amount, which includes the amount paid at the auction plus the applicable 20% amount discussed in the video.

So, using that $50,000 example, the redemption amount can become substantially more than the original delinquent taxes.

And that’s why you really don’t want to let an inherited property’s delinquent taxes get to this stage if you can avoid it.

Need Help With an Inherited House With Back Taxes?

If you’re dealing with an inherited property with delinquent taxes and trying to figure out what your options are, we’d be happy to talk with you about it. Simply fill out the form on this page. A member of our team will be in touch with you as soon as possible.

What Happens After the One-Year Redemption Period?

Let’s look at this from the investor’s side for a minute.

After the one-year redemption period expires, the investor may need to go through what’s called the barment process.

Brad explains this as essentially a tax foreclosure process that can also involve a quiet title action. The process notifies the other parties involved and seeks to clear the investor’s title position.

If the process is completed and nobody successfully responds or challenges the process, the investor can ultimately obtain clear title to the property.

But this isn’t quick.

It can cost thousands of dollars and take months to complete.

And from the perspective of the person who inherited the property, the bigger point is this: once the tax lien has been sold, getting the property back becomes a much bigger and more expensive process. Pasted markdown

What If the Inherited House Hasn’t Gone to Auction Yet?

Now let’s flip back to your side.

You’re the heir or family member dealing with an inherited house, and you discover that the property taxes are delinquent.

Hopefully, the property hasn’t been sold at a tax lien auction yet.

The first thing you need to determine is how much is owed.

Then ask the county whether the delinquent taxes have already been published for a tax lien sale.

Some counties may allow delinquent taxes to continue accruing for years without actually selling the tax lien.

Other counties may eventually file a lien or FIFA against the property and move toward a tax lien sale.

A FIFA is essentially a lien recorded against the property for the amount owed.

That means if you eventually sell the property, those delinquent taxes and other amounts owed will have to be dealt with.

The important thing is to find out where you are in the process.

Can You Pay the Property Taxes With Estate Funds?

If you’re dealing with an inherited house, you may be wondering where the money to pay the delinquent taxes is supposed to come from.

Ideally, if you have access to the deceased person’s funds and you’re authorized to use them, the property taxes could potentially be paid from the estate.

For example, if you’ve already gone through probate and have your probate letters, you may have access to an estate account.

But every situation is different.

Maybe you haven’t even filed probate yet. Maybe you don’t have access to the deceased person’s bank account. Or maybe you have some other legal authorization that gives you access to the funds.

In those situations, you need to determine what you’re actually authorized to do.

Sometimes an heir may end up paying the property taxes from personal funds and then seeking reimbursement from the estate later.

That’s something you should discuss with the appropriate attorney or professional handling the estate.

Don’t Ignore Delinquent Property Taxes on an Inherited House

The last thing you want is for an inherited property to reach a tax lien sale simply because nobody was paying attention to the property taxes.

If the taxes are delinquent, find out:

1. Exactly how much is owed
2. Whether county and city taxes are both owed
3. Whether a lien or FIFA has been filed
4. Whether the property has been published for a tax lien sale
5. Whether the tax lien has already been sold
6. What options you have for paying the delinquent taxes

The earlier you understand what’s happening, the more options you may have.

And if the property has already gone to a tax lien sale, there may still be a redemption process available, but it becomes much more complicated and potentially much more expensive.

So, the moral of the story is pretty simple:

Pay attention to the property taxes.

What Should You Do If You Inherited a House With Back Taxes?

If you’ve inherited a house in Georgia and the property has delinquent property taxes, don’t just put the problem off.

Find out what’s owed. Find out whether there’s a tax lien. Find out whether the property has been published for auction.

And if you’re considering selling the inherited property, you also have options.

We’ve helped more than 300 sellers over the last 10 years sell their properties for cash. If a cash sale isn’t what you want, I’m also a licensed real estate agent in Georgia and can talk with you about listing the property traditionally.

Whether you want to explore a cash offer for an inherited house with back taxes or discuss listing the inherited property for sale, fill out the form.

A member of our team will be in touch with you as soon as possible.