When The Taxes Go Unpaid
G.S. 105-374 — foreclosure of the tax lien like a mortgage, and redemption until the sale is confirmed
When interest starts. In North Carolina, property taxes are due and payable on September 1 and may be paid at face amount before January 6. From January 6 to February 1, interest accrues at the rate of two percent; from February 1 until everything is paid, at three-fourths of one percent a month or fraction of a month.
Foreclosing the lien. A taxing unit may foreclose its tax lien by an action in the nature of an action to foreclose a mortgage, brought in the county where the property is. The owner of record and the owner's spouse, other taxing units with liens, and all other lienholders of record are made parties and served with a summons.
Redemption. Before the foreclosure sale is confirmed, the property can be redeemed: the person redeeming pays, before the action is discontinued, at least all taxes then due to the taxing unit, with penalties, interest and costs. Redemption between the sale and the order of confirmation also carries the commissioner's fee, which is not more than five percent of the purchase price.
After the sale. For 10 days after the commissioner files the report of sale, an increased bid may be filed, and judgment confirming the sale may be sought only once that period passes without an exception or a higher bid. From the proceeds come the costs of the action, then the taxes the property was ordered sold for, then the other claims the section lists; any balance left is paid as the court directs, or into court for the persons entitled to it.
The in rem route. Instead, the taxing unit may have the tax collector docket a certificate of the unpaid taxes with the clerk of superior court as a judgment against the property, no earlier than 30 days after the tax liens were advertised, after notice to the taxpayer at least 30 days before docketing. Mailing and publication costs and a charge of $250 are added. Execution issues after three months and before two years from the judgment, the sheriff sends notice at least 30 days before the sale, and before execution anyone with an interest in the property may move to set the judgment aside on the ground that the tax was paid or the lien is invalid.
Advertising tax liens, discounts for paying early, attachment and garnishment for unpaid taxes, and resale by a taxing unit that buys at the sale are not on this page. Whether a particular property can still be redeemed is a question for a licensed North Carolina attorney.
Sources for this section (3)
- G.S. 105-374 — Foreclosure of tax lien by action in nature of action to foreclose a mortgage
- G.S. 105-375 — In rem method of foreclosure
- G.S. 105-360 — Due date; interest for nonpayment of taxes
Legal information, not legal advice. Verified as of September 2026. Applying it to a particular situation is the work of a licensed North Carolina attorney.