Key Takeaway:
- Arkansas uses a tax deed system, not a tax lien system.
- Counties certify delinquent properties to the Commissioner of State Lands after one year of unpaid taxes.
- Properties are usually auctioned about two years after certification.
- Owners can redeem or sell the house up until 4 PM the day before the auction.
- After the auction, redemption is no longer possible and equity may be lost.
- Investors such as Paranova Property Buyers can purchase houses with back taxes, pay off the debt, and help homeowners avoid losing everything at auction.
Table of Contents
Falling behind on property taxes in Arkansas can put your home at risk of being sold at a state tax deed sale. Unlike some states that use tax liens, Arkansas follows a tax deed process, which means if your taxes remain unpaid, the property itself can eventually be sold by the Commissioner of State Lands to recover the debt. The good news is, you may still have options to sell your house before the auction, pay off the back taxes, and protect your equity.
How Arkansas’s Tax Deed Process Works
In Arkansas, unpaid property taxes don’t just sit as a lien against your house. Instead, they trigger a process that can ultimately lead to a tax deed sale. Here’s how it unfolds:
- Delinquency and Certification: When taxes go unpaid past the deadline, the county certifies the property to the Arkansas Commissioner of State Lands (COSL).
- Redemption Period: Until 4 p.m. on the last business day before the auction, owners can “redeem” the property by paying the past-due taxes, penalties, interest, and fees.
- Auction Sale: If not redeemed, COSL auctions the property at a public tax deed sale. Bidders must pay the full amount of taxes and costs owed.
- No Redemption After Sale: As of July 2023, once a property is sold at a COSL auction, redemption is no longer allowed.
- Limited Warranty Deed Issued: Buyers receive a limited warranty deed, which transfers the state’s interest but does not guarantee a clean title. Many purchasers pursue a quiet title action afterward.
When Does Arkansas Auction Off Property for Back Taxes?
4In Arkansas, the auction does not happen right away. First, when property taxes go unpaid for one year past the due date, the county certifies the property to the Commissioner of State Lands. Once certified, the property is scheduled for a public tax deed auction, usually about two years after certification.
The state must send notice at least 30 days before the auction to the property owner and other interested parties. Until 4 PM on the last business day before the auction, you still have the right to redeem the property by paying all back taxes, penalties, interest, and fees. After that deadline, redemption is no longer allowed and the property will be sold at auction.
What This Means for Homeowners
If you own a property in Arkansas and fall behind on your taxes, the risk is not just a late fee. Once your county certifies the property to the Commissioner of State Lands, you are on a strict timeline. You can still redeem the property before the auction by paying the taxes, interest, and costs, but if you wait too long, the home can be sold at a public auction and redemption will no longer be possible.
For many homeowners, the challenge is coming up with enough money in time. If you have equity in your home, selling it before the auction may be a way to protect that value. By working with a buyer or investor who can pay off the back taxes, you can avoid losing the property at a tax deed sale and keep the remaining equity for yourself.
This is why it is so important to act quickly. Waiting until the last moment can limit your options, and once the auction is complete, the home and your equity may be gone for good.
How to Sell a House in Arkansas with Back Taxes
Selling a house with delinquent property taxes in Arkansas is possible, but it requires planning. Here are the main steps:
- Find out exactly how much you owe. Contact your county tax collector or check with the Commissioner of State Lands to confirm the total balance, including penalties, interest, and fees.
- Decide if you can redeem or need to sell. If you can pay the amount due, you may redeem the property and keep it. If not, selling may be the best way to protect your equity before the auction.
- Work with a buyer who understands tax deed rules. Not every buyer or real estate agent is familiar with Arkansas’s tax deed process. Many homeowners choose to work with investors who can close quickly and pay off the taxes.
- Use the sale proceeds to clear the debt. At closing, the back taxes are paid out of the sale proceeds. After that, you receive any remaining balance.
- Close the sale before the auction date. Timing is critical. Once the auction occurs, redemption is no longer allowed, and the property can be lost.
How Investors Can Help Homeowners with Back Taxes in Arkansas
For many homeowners, coming up with the money to redeem a property before the auction is not realistic. This is where real estate investors can step in and provide a solution. Investors are experienced with Arkansas’s tax deed process and can move quickly to purchase a house before it is sold at auction.
An investor can pay off the back taxes as part of the sale, which clears the debt and allows the homeowner to walk away with any remaining equity. Because investors do not rely on traditional mortgage financing, they are often able to close in a matter of days, not months.
Working with a local company such as Paranova Property Buyers can be especially helpful. We understand the strict deadlines involved with tax deed sales and can make fair cash offers on properties with back taxes. Best of all, you can sell your house as-is with no repairs or cleaning needed. By selling directly to an investor, you avoid the risk of losing your house and your equity at auction, and you can resolve the problem quickly without additional stress.
Risks and Considerations for Homeowners
Selling a house with delinquent property taxes in Arkansas can protect your equity, but there are a few risks to understand. First, waiting too long can limit your choices. Once the Commissioner of State Lands schedules the auction, the deadline to act is strict. If you do not redeem or sell before the auction, you will likely lose the property.
Second, even if you find a buyer, the closing process must account for the delinquent taxes. The buyer or the closing agent will typically use part of the sale proceeds to pay off what is owed. If the amount of back taxes is higher than the value of the property, selling may not be an option, and redemption could be the only path.
Finally, remember that a tax deed sale does not guarantee that all liens or issues disappear. If you sell before the auction, you are in a better position to negotiate with buyers and clear title properly through a standard real estate closing. Acting early gives you more control and often results in a better outcome than waiting for the auction.
Frequently Asked Questions
Yes. You can sell your house even if you have delinquent property taxes. At closing, the taxes are paid off from the sale proceeds so the title is cleared.
If you do not pay, your county will eventually certify the property to the Commissioner of State Lands. The state can then auction the property at a tax deed sale, and you may lose your home and any equity you had.
You can redeem the property by paying all back taxes, interest, penalties, and fees until 4 p.m. on the last business day before the auction. After the auction, redemption is no longer allowed.
Not always. A tax deed sale transfers the state’s interest but does not guarantee a clean title. Mortgages, judgments, or other liens may still remain. This is why buyers often file a quiet title action after purchase.
Yes. Selling before the sale allows you to pay off the delinquent taxes and keep any remaining equity. Waiting until after the auction often means losing both the property and your equity.
Falling behind on property taxes in Arkansas can feel overwhelming, but you are not without options. Because the state follows a tax deed system, the risk is greater than just having a lien. If the taxes remain unpaid, your county can certify the property to the Commissioner of State Lands, and it may be sold at a public auction. Once the auction takes place, redemption is no longer possible and your equity could be lost.
The key is to act before the auction date. By selling your house in Arkansas with delinquent property taxes, you can pay off the debt, avoid a tax deed sale, and keep the remaining equity. Investors and experienced buyers can often step in quickly to cover the back taxes and close fast, giving you a way out before the state steps in.
If you are dealing with back taxes, do not wait until it is too late. Acting early can make the difference between losing your property and walking away with cash in hand. Paranova Property Buyers specializes in helping homeowners in this situation by providing fair cash offers and fast closings. Call us today at 501-314-8710 to discuss your options and see how we can help you move forward.
