Selling a House With Delinquent Property Taxes in Kentucky
Yes. Back taxes on a Kentucky house get paid out of the sale at closing. Kentucky doesn't auction houses for unpaid taxes the way some states do. An unpaid bill becomes a certificate of delinquency that earns 12% interest, and after 90 days a third-party purchaser can buy it and add fees. No one can sue to foreclose until a year after the taxes went delinquent, and a 2026 law changed how counties collect and what happens to surplus. Paying the certificate off early, or selling, keeps the fees from snowballing.
Reviewed by Dennis Fassett, founder of Dennis Buys Houses · Updated November 2026
For Kentucky owners and heirs behind on property taxes, with notes on Louisville and Lexington. General information, not legal advice. Your county clerk and county attorney handle delinquent bills.
How a Bill Becomes a Certificate
- 1Fall bill
Most counties offer a discount for paying early, and the full amount is generally due by December 31.
- 2Delinquency and penalties
Penalties begin after the due date, and the sheriff later turns unpaid bills over to the county clerk.
- 3Certificate of delinquency
The unpaid bill becomes a lien that bears 12% interest. Two notices are mailed, and the second gives the sale date.
- 4Third-party purchase
After 90 days, an outside buyer can pay the certificate and step into the county's shoes, adding its own fees.
- 5Foreclosure, at least a year later
After a 45-day notice, no suit can be filed until one year after delinquency. (KRS 134.546)
What Changed in 2026
A 2026 law signed April 7 lets counties use the city land-tax enforcement process, requires installment plans, shields certificates with a payment plan or pending suit from third-party purchase, and caps routine attorney's fees. It also says unclaimed surplus from a judicial sale goes to the state after two years. (2026 Ky. Acts ch. 48) Ask the county attorney how your county is handling it.
Paying Off a Certificate
Until a foreclosure sale, you can pay off a certificate with the taxes, interest, penalties and fees owed. Third-party purchasers must send notice within 50 days of buying and every year after that. (KRS 134.490) The longer you wait, the more fees pile up.
Kentucky gives you time, but a third-party purchaser's fees can quickly dwarf the original tax. Pay it or sell before they pile up.
Want a Number to Compare Against?
Tell me what's owed and who holds the certificates. I'll give you an as-is price to compare with paying them off, and I'll tell you if keeping the house makes more sense.
Get the Exact Payoff
Ask the county clerk who holds each certificate and what's owed. If a third-party purchaser holds it, get a written payoff from them. Then ask the PVA whether you're getting every exemption you qualify for.
Louisville and Lexington
Louisville Metro and Lexington-Fayette are merged city-county governments with their own collection staff, and Louisville Metro runs a landbank for abandoned properties. Delinquent houses in both can end up in court enforcement. Call the county attorney's delinquent tax office before a suit is filed.
After a Court Sale
If a tax foreclosure sale brings less than the assessed value, the 2026 law lets the owner redeem within 60 days by paying the buyer's price plus 18% annual interest. Proceeds pay costs and taxes first, then other claims; owners can claim what's left, but unclaimed surplus goes to the state after two years.
Keep It or Sell It
Keep It
If you can pay off the certificates or get on an installment plan, and stay current, do it.
Sell It
If the taxes, fees, repairs and insurance are more than you can carry, a sale pays the certificates at closing.
When the house needs work or a tax suit is coming, an as-is sale can close before it. An as-is sale to a real estate investor is the simplest exit: you skip the showings, skip the repairs, skip the clean-out, and set the closing date yourself. No clean-out at Dennis Buys Houses means you take only what you want and leave everything else for us. We sort it out, and if we find anything that looks personal or valuable, it goes back to you.
Selling With Certificates Outstanding
You still own the house. The title company will find the certificates and pay them at closing, so get written payoffs from the clerk and any third-party purchaser early.
An Inherited House With Back Taxes
Taxes often fall behind after a death. Get authority in place, then deal with the certificates before third-party fees grow. (See How to Sell a House in Probate in Kentucky and Selling an Inherited House in Kentucky.)
Back Taxes vs. Foreclosure
These are separate tracks. Lenders often pay delinquent taxes and add them to your loan, which can lead to a default. (See Selling a House in Foreclosure in Kentucky.)
Common Mistakes
- Ignoring the clerk's notices until a third party buys the certificate.
- Not asking for an installment plan.
- Paying the county when a third-party purchaser holds the certificate.
- Missing exemptions you qualify for.
- Letting surplus go unclaimed for two years.
- Assuming the house can't be foreclosed for unpaid taxes.
Where I Fit, and Where I Don't
I help most when several years of certificates have piled up, a third-party purchaser is adding fees, a suit is coming, or the house is inherited or empty.
And you won't be asked to empty the house for Dennis Buys Houses. Leave what you don't want; we'll take care of it.
If you live there and can pay off or set up a plan and stay current, that's usually better than selling, and I'll say so.
Whatever the situation, I'll tell you upfront whether I'm the right fit for it.
Frequently Asked Questions
Yes. The certificates and fees are paid from the sale at closing.
A lien created when a Kentucky property tax bill goes unpaid. It bears 12% interest and can be bought by a third party.
Yes, through a court foreclosure, but not until at least a year after the taxes became delinquent.
No. With an as-is sale, take what you want and leave the rest. Dennis Buys Houses handles what's left.
Yes. A 2026 law requires county attorneys to offer installment plans.
Owners can claim it, but unclaimed surplus goes to the state after two years.
Your county clerk and county attorney handle delinquent bills. Key sources: KRS 134.546 (one-year wait), KRS 134.490 (purchaser notices) and 2026 Ky. Acts ch. 48.
Kentucky Selling Guides
- How to Sell a House in Probate in Kentucky
- Selling an Inherited House in Kentucky
- Selling a Vacant House in Kentucky
- Selling a House With Bad Tenants in Kentucky
- Selling a House in Foreclosure in Kentucky
Behind on Kentucky Property Taxes?
Tell me what's owed and who holds it. You'll get a straight as-is number, and if paying it off is the smarter move, I'll tell you.