Property Tax Liens in Indiana: What Every Home Buyer Must Know Before Closing
Missy Horner
President, Empire Title Services | 20+ Years Experience
Quick Answer: Indiana Property Tax Liens
What they are: Legal claims against a property for unpaid county property taxes
Always found in: Every Empire Title title search — we review county tax records as a standard step
Who pays them: The seller, typically from sale proceeds at closing
Serious cases: Tax certificate sales or tax deeds may require attorney involvement
Questions? Call Empire Title: (765) 935-9966
Indiana homebuyers have a lot to think about during a real estate transaction — inspection results, mortgage rates, closing costs. Property taxes often don't cross their minds.
But unpaid property taxes are one of the most common title issues Empire Title discovers during the title search process. Here's what you need to understand before your closing.
What Is a Property Tax Lien?
In Indiana, property taxes are billed twice a year — in May and November. When a property owner fails to pay, the county treasurer places a tax lien against the property. This is a legal claim for the unpaid amount, plus interest and penalties.
The critical thing to understand: the lien attaches to the property, not the owner. If you purchase a home with an existing tax lien, you're buying the lien along with it — unless it's resolved at closing.
How Empire Title Finds Tax Liens
During every title search, our team reviews county tax records to identify:
Who Pays Property Tax Liens at Closing?
In Indiana real estate transactions, the seller is responsible for clearing any delinquent taxes before ownership can transfer to the buyer. In most cases, this happens at the closing table — the title company calculates the total owed (including interest and penalties) and collects it from the seller's proceeds.
How It Works at the Closing Table
Indiana Tax Sales: A More Complicated Situation
Indiana has a two-step tax delinquency process that buyers and sellers should understand:
Step 1: Tax Lien Certificate Sale
If taxes go unpaid for a year, the county holds a tax sale in October. Investors can purchase tax certificates, giving them a lien on the property and the right to collect taxes plus high interest (10-15% annually).
Step 2: Tax Deed Application
If the property owner doesn't redeem the certificate within the redemption period (usually 1 year), the certificate holder can apply for a tax deed — taking actual ownership of the property.
When a tax certificate has been sold, clearing it requires paying off the certificate holder — including their accrued interest. Empire Title coordinates this payoff process and confirms the lien release before your closing proceeds.
Frequently Asked Questions
What is a property tax lien in Indiana?
A property tax lien in Indiana is a legal claim placed against a property by the county government when property taxes go unpaid. The lien attaches to the property — not just the owner — meaning it must be resolved before the property can be sold or refinanced.
Who pays outstanding property taxes at closing in Indiana?
In Indiana, the seller is responsible for paying any delinquent property taxes at closing. Outstanding tax liens must be satisfied — typically from the seller's proceeds — before ownership can legally transfer to the buyer.
How does a title search find property tax liens?
During a title search, Empire Title reviews county tax records and court records to identify any unpaid property taxes, tax certificates sold at county tax sales, and tax judgments. This is a standard part of every title search we perform.
What happens if property taxes are in a tax sale in Indiana?
If Indiana property taxes are severely delinquent, the county may sell a tax certificate to an investor at a tax sale. The investor can eventually apply for a tax deed if taxes remain unpaid. These situations require legal resolution before a clear title can be issued — sometimes involving an attorney and a quiet title action.
Missy Horner
President, Empire Title Services
With over 20 years of experience in Indiana and Ohio real estate closings, Missy Horner leads Empire Title Services in providing expert title insurance, property searches, and closing coordination. A trusted resource for real estate agents, lenders, and homeowners throughout Wayne, Randolph, and Henry counties.