Here is a situation that shows up in Tampa more often than people expect. A homeowner falls behind with the IRS. Money gets tight. The property tax bill comes in November, and it does not get paid. A year later, an investor holds a tax certificate on the house, the IRS has a lien, and the mortgage company is asking questions.
Three creditors, one house. Who wins? For the property taxes versus the IRS, the answer is clear: Hillsborough County’s property taxes almost always come first. Here is why, and what it means for you.
The federal rule that puts local taxes first
The federal tax lien is powerful, but Congress made exceptions for certain interests even when the IRS has filed its notice. These are the so-called superpriorities in IRC 6323(b). Paragraph (6) covers real property tax and special assessment liens.
Under IRC 6323(b)(6), as against the holder of a lien on real property, the federal tax lien is not valid if the other lien is entitled under local law to priority over security interests in the property that are prior in time, and the lien secures one of these:
- a tax of general application levied by any taxing authority based on the value of the property;
- a special assessment imposed directly on the property by a taxing authority to pay for a public improvement; or
- charges for utilities or public services furnished to the property by the United States, a state or political subdivision, or one of their instrumentalities.
Florida’s ad valorem property tax fits the first category. Florida law makes property taxes a first lien on the property, superior to other liens, so the local-law condition is satisfied. The result: unpaid Hillsborough County property taxes outrank the IRS’s filed lien on the same parcel.
Special assessments for public improvements and government utility charges, such as municipal water service, can also qualify, depending on how they are structured under Florida law.
Florida’s first-lien statute
The local-law half of the test comes from Fla. Stat. 197.122(1). It provides that all taxes imposed under the Florida Constitution and laws are a first lien, superior to all other liens, on any property against which the taxes have been assessed, and that the lien continues in full force from January 1 of the year the taxes were levied until discharged by payment or otherwise as the statute provides.
Two features of that statute matter in IRS cases. First, it is a first lien over earlier security interests, which is exactly what IRC 6323(b)(6) requires. Second, it attaches as of January 1 of the tax year, so a property tax lien for 2026 already exists in early 2026, long before the bill arrives in November. When a Tampa house with a federal tax lien is sold mid-year, the closing statement prorates and pays current-year property taxes ahead of the IRS for that reason.
How Florida collects unpaid property taxes
Florida does not foreclose on property directly for unpaid taxes. It sells tax certificates. Chapter 197 of the Florida Statutes sets out the process.
- Taxes become delinquent. Florida property taxes for a year are payable starting in November and become delinquent in the spring of the following year.
- Tax certificates are sold. The Hillsborough County Tax Collector sells certificates for the delinquent amount. An investor who buys a certificate pays the tax and earns interest when the owner redeems.
- Tax deed application. Under Fla. Stat. 197.502(1), the certificate holder may apply for a tax deed any time after two years have elapsed since April 1 of the year the certificate was issued, and before the certificate is canceled.
- Tax deed sale. The property is sold at public auction by the Clerk, after notice. The owner can redeem up until the process cuts off that right.
The details, including the notices sent and the special rules for homestead property, are in Chapter 197. The point for our purposes is that the tax deed process can end your ownership, and the IRS lien does not stop it.
What happens to the IRS lien at a tax deed sale
A Florida tax deed sale is not a court foreclosure. It is a sale under a statutory lien conducted without a lawsuit. Federal law has a specific rule for that kind of sale: IRC 7425(b).
Under IRC 7425(b) and (c), if a Notice of Federal Tax Lien was filed more than 30 days before the sale, the sale is made subject to the federal lien unless the IRS receives written notice of the sale, by registered or certified mail or personal service, at least 25 days before the sale. If proper notice is given, the sale has the effect local law provides, which for a tax deed generally means the junior federal lien is divested.
Even then, the IRS has a second chance. IRC 7425(d) gives the United States the right to redeem real property sold to satisfy a lien prior to its own, within 120 days from the date of sale or the period allowed for redemption under local law, whichever is longer.
For a tax deed buyer, that means checking for federal tax liens and confirming the IRS received proper notice is part of the job. For the homeowner, it means the IRS will not quietly protect your equity. If the house goes to tax deed, any surplus after the sale is distributed under Florida law, and the IRS will claim its share from what would otherwise have come to you.
The mortgage company is in the middle
Most mortgages require the homeowner to keep property taxes paid, and many lenders escrow them. When taxes go unpaid on a non-escrowed loan, the lender will often pay them to protect its position and add the amount to the loan. That keeps the tax deed process away, but it increases what you owe the lender, and the lender may treat the failure to pay as a default.
The IRS lien, meanwhile, usually sits behind a mortgage that was recorded before the IRS filed its notice. When the house is sold or refinanced, the order of payment is generally property taxes, then the senior mortgage, then the IRS, then everyone else, though every title is different. My guide on IRS foreclosure suits and mortgage foreclosures covers what happens when a lender forecloses with an IRS lien on the property.
Why paying property taxes usually comes first
When money is tight and both the IRS and the Tax Collector want it, here is how I usually think about it.
- Property taxes protect the house itself. Unpaid property taxes lead to a tax deed that can end your ownership. The IRS rarely seizes a principal residence and needs a federal judge’s approval to do it, as explained in IRS seizure of a home in Tampa.
- Property taxes outrank the IRS anyway. Paying the IRS while the property taxes go unpaid does not improve your position on the house.
- The IRS counts property taxes as a necessary expense. Property taxes are part of the housing and utilities allowance in the IRS Collection Financial Standards. See the Hillsborough County housing standards.
- The IRS has ways to wait. An installment agreement, currently not collectible status or an offer can manage the federal side while you keep local taxes current.
This is general guidance. Every situation has its own facts, and sometimes an IRS levy is the more urgent fire. But as a default, keep the Tax Collector paid.
Buying property with an IRS lien in Hillsborough County
If you are on the other side, buying at a tax deed sale or foreclosure auction, the federal lien rules are not optional reading. Search for notices in the Clerk’s Official Records, confirm whether the IRS received notice of the sale under IRC 7425(c), and account for the 120-day federal redemption right in your plans. My guide on searching the Hillsborough records for an IRS lien walks through the search.
GetIRSHelp.com has more on federal tax liens.
The IRS is a big creditor. In the line at the Hillsborough County courthouse, it still stands behind the Tax Collector.