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Selling a Louisville house when you are behind on property taxes

You can sell a Louisville house with delinquent property taxes, and the back taxes are paid from the sale proceeds at closing. Timing matters because the debt grows in steps. Jefferson County bills still unpaid when the Sheriff closes the books on April 15 go to the County Clerk as certificates of delinquency, which carry 12 percent annual interest plus a 10 percent clerk fee and a 20 percent county attorney fee. Each summer the Clerk sells certificates to third-party purchasers, who add their own fees and can file a foreclosure once the taxes have been delinquent for a year.

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Does this sound familiar?

If one of these fits, this guide is written for you.

  • A tax bill went unpaid for a year or two, and the amount keeps climbing.
  • Letters keep arriving from a company you never dealt with, saying it bought your tax bill.
  • A foreclosure notice came from a tax certificate holder, not from a mortgage lender.
  • The house is paid off or inherited, so no mortgage escrow account is paying the taxes anymore.

Step by step

What to do, in order

Before you accept any offer.

  1. Find out who holds the bill now

    Jefferson County bills carry a 2 percent discount through December 1 and are due at face value through January 2. Then the Sheriff adds a 5 percent penalty, and from February 4 a 10 percent penalty plus a 10 percent sheriff's add-on. At the close of business on April 15, unpaid bills go to the County Clerk. Search them on the Clerk's CCLIX system or call its Delinquent Tax Department at (502) 574-5884 to see whether a third-party purchaser now holds yours.

  2. Know what is being added

    Once the Clerk holds a certificate, it adds 12 percent simple interest a year, figured monthly with any part of a month counted as a full month, a 10 percent clerk fee, a 20 percent county attorney fee, a $10 lien fee, and mailing and advertising costs. A third-party purchaser collects interest on what it paid plus capped prelitigation fees of up to $350, $560 or $700 depending on the size of the certificate, up to $115 in assignment and recording fees, and attorney fees once it files suit.

  3. Ask about a payment plan before the summer sale

    The Clerk sells certificates once a year. In 2026, the sale of 2025 bills was held on July 17. Certificates under a payment plan in good standing with the County Attorney are kept out of the sale, and the Clerk's office says the County Attorney may offer a plan before the end of June, (502) 574-6331. After a sale, a registered third-party purchaser must offer a monthly plan if you ask in writing, for a processing fee of up to $8 a month.

  4. Watch the foreclosure clock

    A certificate holder can sue to collect or foreclose once the taxes have been delinquent for one year, and has 11 years to do it. A third-party purchaser must mail you notice within 50 days of buying the certificate, repeat it every six months, and send a final notice at least 45 days before filing suit, with copies to any mortgage lender. If the master commissioner's sale brings less than two thirds of the appraised value, the owner has six months to redeem.

  5. Pay it off at closing

    The title company or closing attorney gets a written payoff for each certificate and pays it from your proceeds. A third-party purchaser paid in full must record a release under the same 30-day rule that applies to a paid mortgage. If the purchaser cannot be found, send a registered letter, wait 30 days without an answer, then pay the Clerk, who holds the money for the purchaser and releases the lien for a $20 fee.

Paperwork

Documents to gather

A title company or attorney will ask for most of these. Having them ready shortens the closing.

  • The latest tax bill or the property's record in the Clerk's delinquent tax search
  • Every notice from the County Attorney, the County Clerk or a third-party purchaser
  • A current written payoff for each delinquent year
  • Any payment plan agreement you signed
  • Mortgage statements, which show whether an escrow account pays the taxes
  • Court papers, if a certificate holder has already filed suit

What we do

How Louisville Cash Offers can help

  • List the delinquent years in your request so buyer partners can factor the payoff into their offers from the start.
  • Cash buyers do not wait on mortgage approval, which matters once a certificate holder's 45-day notice has arrived.
  • Compare offers by what you would keep after every certificate and the current year's taxes are paid.
  • Requesting offers is free and creates no obligation. Paying the taxes or setting up a plan may be the better answer, and you can still choose it.

Caution

Watch out for

  • The lien for delinquent taxes lasts 11 years and is not erased by a gift or an inheritance, so expect every delinquent year to be paid from the proceeds at closing.
  • Once a third-party purchaser owns a certificate, the payoff goes to that purchaser, so get the amount in writing and confirm a release is recorded afterward.
  • Be wary of anyone who offers to pay your back taxes in exchange for signing over the deed. Keep any sale with a title company or attorney, and compare the offer with the equity you have.

Questions

Questions about this situation

Can a company that bought my tax bill foreclose on my Louisville house?

Yes. In Kentucky a third-party purchaser of a certificate of delinquency can sue to collect or foreclose once the taxes have been delinquent for one year, after mailing you a notice at least 45 days before filing. Paying the certificate in full, including from the proceeds of a sale, ends it. A payment plan you keep current is another option, but missed payments let the purchaser go to court.

How are back property taxes paid when I sell my house?

From the sale proceeds. The title company or closing attorney gets a payoff for each delinquent year from the County Clerk or the third-party purchaser holding it and pays it at closing. The amount comes out of what you receive, not out of the buyer's price, and the holder then has to release the lien.

Who do I pay delinquent property taxes to in Jefferson County?

The Sheriff collects bills through April 15. After that they go to the County Clerk at Metro Hall, 527 W. Jefferson St., Suite 100A, unless a third-party purchaser has bought the certificate, in which case you pay that purchaser. The Clerk's Delinquent Tax Department, (502) 574-5884, can tell you who holds a bill.

Sources

Where the facts on this page come from, with the date each source was read.

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