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“I’m Close to Retiring and Behind on Property Taxes — Is Now a Bad Time to Sell?”

Property taxes can sneak up on you, especially as retirement gets closer. If you’re behind on your property taxes and starting to stress about what that means for your financial future, you’re definitely not alone. Managing money in those last working years can be tricky, and what starts as a small problem can quickly snowball.

So, Should You Sell Your House If You’re Behind on Taxes?

The short answer: selling your home when you owe back property taxes isn’t automatically a bad idea — but it’s not a magic fix either.

Why Falling Behind on Property Taxes Happens More Than You Think

People often underestimate how fast property taxes can jump, especially if your home’s value has gone up a lot in recent years. Local governments don’t mess around when it comes to collecting what’s owed. If taxes go unpaid for too long, counties can place liens on your home, and eventually, you could even face a tax sale. It’s scary, but it’s more common than most realize.

Is 2024 a Good or Bad Time to Sell?

The housing market this year has been a bit of a rollercoaster. Home prices are still holding strong in many places, even though higher mortgage rates have cooled some buyers. Inventory remains tight, which usually gives sellers some leverage. So, if you’ve got decent equity, now might be a good moment — as long as you can handle the back taxes.

Here’s the catch: when you sell a house with unpaid property taxes, those taxes have to be paid off at closing. The money you owe comes straight out of the sale proceeds before you get anything. So if your equity isn’t big or home values are dipping in your area, you might walk away with less cash than you expect — or, in rare cases, none at all.

What Happens at Closing When You Owe Property Taxes?

Many homeowners don’t realize how the closing works in this situation. The title company or attorney will check for unpaid taxes and make sure they get paid before the sale wraps up. Buyers and their lenders won’t take on unpaid property taxes — that’s a big no-no.

Also, it’s not just the original tax bill you owe. Interest, penalties, and sometimes legal fees can add up fast. So if you’re living on a fixed income or counting on this sale for retirement cash, it can be a nasty surprise when your expected payout shrinks.

Should You Wait or Sell Now?

Waiting might feel like the safer bet if you’re hoping home prices climb higher. But trying to time the market perfectly is tricky, even for pros. If you’re already behind on taxes, waiting might just make that debt grow bigger.

On the flip side, selling in a hurry isn’t fun either — fire sales usually mean accepting less than your home’s worth. But if you have solid equity, selling now could clear your tax debts, ease your stress, and set you up better for retirement. Some folks use the money to downsize, pay off other debts, or rent temporarily while they figure out the next step.

What If Selling Isn’t Your Best Option?

Not every homeowner benefits from selling, especially if your local market is sluggish or your tax debt is minor. If your home’s value isn’t growing, or is falling, and you’re barely breaking even, there might be better options.

Many counties offer payment plans or hardship programs tailored for seniors. Some states even have tax deferral programs aimed at retirees or low-income residents, though they often come with strict rules and lots of paperwork.

Also, if your home needs major repairs, selling it quickly “as-is” could mean lowball offers. Buyers factor in the repair costs and risks, sometimes driving the price down more than you’d expect.

The Emotional Side of Selling Your Home

It’s not just about dollars and cents. Selling a home you’ve lived in for years — especially as you near retirement — is emotional. It’s normal to feel attached or scared about what comes next. But holding on to a home you can’t afford can make things worse in the long run.

Think About Your Retirement Goals

If retiring comfortably is your goal, hanging onto a house with growing tax debt is a big risk. Downsizing can free up cash and shrink your monthly bills — not just taxes, but maintenance, insurance, and utilities too. Sometimes moving to a state with lower taxes or no state income tax can seriously stretch your retirement dollars.

When Selling Isn’t the Answer

Let’s be real: selling isn’t always possible. If you owe more on your mortgage than the house is worth, or if there are multiple liens, you might have to bring money to the table to sell. That’s tough to swallow, but it’s why expert advice is so important. A real estate agent experienced with tough sales or a financial planner who knows retirement issues can help you figure out your best options.

Wrapping It Up

There’s no perfect time to sell, especially when you’re behind on taxes and retirement is close. But ignoring the issue usually makes things worse. I’ve seen people wait too long, only to lose their home or watch their equity disappear under penalties and fees.

If you have equity and the market’s still strong where you live, selling now can be a smart way to reset before retirement. Just make sure you understand exactly how much money you’ll walk away with after taxes and fees, and don’t hesitate to ask for help.

At the end of the day, the best move depends on your unique situation. But staying informed and acting before problems snowball is always a step in the right direction.

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