Can You Sell a House With Back Taxes Owed in Massachusetts?

The letters from the town get more formal, then something called a tax taking is recorded against the property, and it starts to feel as though the house is no longer yours to sell.

It is. Can you sell a house with back taxes owed in Massachusetts? Yes, and a tax taking does not change that. What it changes is the arithmetic, the timetable, and how much of your own equity you walk away with if you leave it too long.

Financial pressure of this kind is behind roughly 15 percent of the sellers who come to us, so the sequence below is one we see regularly.

What the town has actually done

Unpaid property tax in Massachusetts follows a defined path under Chapter 60 of the General Laws, and the language is more alarming than the reality at each stage.

The municipality issues demands. If the tax stays unpaid, the collector can make a tax taking, which is recorded at the Registry of Deeds. The word is misleading. A taking does not transfer ownership of your house to the town. It creates a tax title, which is the municipality’s secured interest in the property for the money owed.

You still own the house. You can still list it, still accept an offer, and still close on it. What sits on the record is a lien that has to be cleared out of the proceeds, exactly like a mortgage.

Interest accrues on tax title accounts at a rate set by statute, and it is meaningfully higher than ordinary mortgage interest, along with the town’s costs. The balance therefore grows faster than most owners expect while they decide what to do. Ask the collector for a written redemption figure rather than working from the original tax bill.

Redemption, and the window you actually have

Until the municipality forecloses the tax title in the Land Court, you hold a right of redemption. Paying the taxes, accrued interest and costs clears the tax title and ends the process.

That right is not open ended. Once the town petitions the Land Court and a judgment of foreclosure enters, redemption closes and ownership passes. Everything worth doing happens before that judgment, which is why the single most useful thing an owner in this position can do is find out precisely where the town is in the process, in writing.

Selling is a form of redemption. A sale that produces enough to clear the tax title does exactly what paying it would do, and it does it with somebody else’s money.

The 2024 change that matters more than anything else here

This is the part almost no national article covers, and it is the reason leaving it too long is now a specific and quantifiable mistake.

Historically, Massachusetts was among a minority of states whose tax foreclosure law did not require a municipality to return the difference where a foreclosed property was worth far more than the tax debt. A property with modest arrears could be lost entirely, and the owner’s equity along with it.

In 2023 the United States Supreme Court held in Tyler v. Hennepin County that keeping surplus equity in that situation is an unconstitutional taking under the Fifth Amendment. Massachusetts responded by enacting surplus funds provisions as part of the fiscal 2025 budget, signed in 2024, which require municipalities to return surplus proceeds from a tax lien foreclosure to the former owner.

Read what that does and does not do. It protects the surplus. It does not protect the house. You still lose the property at foreclosure, you receive a payment afterwards rather than owning an asset, and recovering surplus funds is a process rather than a check in the post. Selling before foreclosure remains a far better outcome than relying on the surplus rules, and anyone telling you otherwise is not doing you a favor.

Because this area changed recently and the mechanics are still being worked through in the courts, take specific advice from a Massachusetts attorney about your own situation rather than relying on a general description.

Can you sell a house with back taxes owed? How the closing works

Mechanically, less changes than you would think.

Your closing attorney orders a municipal lien certificate from the town, which sets out exactly what is owed in taxes, betterments, water and sewer charges. This document is ordered on every Massachusetts sale, not only distressed ones, and it is what the closing is reconciled against. Our walk-through of how a municipal lien certificate works in Massachusetts covers the fee, the 10 or 20 day deadline and what recording it does.

The tax title is then paid from the sale proceeds at closing, in order, alongside any mortgage and other liens. Whatever is left after the deeds excise and closing costs is yours.

One caution from experience. The largest shock at a closing is rarely a single fee, it is structural: sellers expect the offer price to arrive as a check and then discover what has to be cleared from the proceeds first. Property taxes and municipal charges are the most common of those, followed by outstanding water and sewer balances. Get the municipal lien certificate ordered early, so the number you are working with is the real one.

Our guide to selling with a lien on the property covers the other lien types that commonly appear alongside tax title, and if a mortgage is also in arrears, selling while behind on payments covers how the two interact.

What to do, in order

The order matters here more than usual, because the clock is running and the interest is compounding.

1. Ask the collector for a written redemption figure, stated to a date. Not the tax bill, not last year’s number, the current figure including interest and costs.
2. Find out whether the town has petitioned the Land Court. Before a petition, you have room. After a judgment of foreclosure, you do not. This single fact determines everything else.
3. Order or ask your attorney to order the municipal lien certificate, which shows taxes, betterments, water and sewer together rather than in pieces.
4. Establish what the property is realistically worth against the total of the tax title, any mortgage, and closing costs. If there is equity, a sale protects it. If there is not, that is a different conversation.
5. Do not wait for the surplus rules to save you. They return money after you have lost the house. Selling beforehand keeps the difference in your hands and on your timetable.
6. Speak to a Massachusetts attorney before agreeing anything, and to a HUD-approved housing counselor if a mortgage is also in default.

If the equity is thin and the timetable is short, a cash sale is often the route that actually completes, because it removes the financing contingency that a distressed property tends to fail. You can request a cash offer and compare it directly against the redemption figure to see what would genuinely be left. If a conventional sale nets you more and there is time to run one, take that instead.

The thing not to do is nothing. Tax title interest accrues, the town’s costs accrue, and the one option that disappears entirely on a fixed date is the ability to sell the house yourself.