North Carolina law, for title research
North Carolina tax deed sales: the land is sold after a court or in rem foreclosure of the tax lien
Every rule below is quoted from the North Carolina General Statutes or another official source, linked and checked on the date shown. General information, not legal advice.
After foreclosing the tax lien, a North Carolina taxing unit sells the land through a commissioner in a court action under section 105-374, or by sheriff's execution on an in rem judgment under section 105-375. On either route, upset bids may follow the sale report, and no deed issues until the sale is confirmed.
How does a North Carolina tax deed sale work?
It ends a foreclosure of the property tax lien. That lien attaches on the listing date for the tax year under section 105-355, and section 105-356, subject to the Revenue Act rules for State taxes, ranks it above all other liens and claims, whenever they arose, regardless of a later transfer, death or bankruptcy of the owner. Each February the tax collector reports unpaid taxes that are liens on real property, the collector must send the record owner notice at least 30 days before publication, and the liens are advertised between March 1 and June 30 under section 105-369, which says a failure to mail to the correct record owner does not affect the validity of the tax lien or of any foreclosure action.
A taxing unit may then use either of two routes. Section 105-374 is a court action in the nature of a mortgage foreclosure, ending in a commissioner's sale, generally at the courthouse door. Section 105-375 is the in rem alternative: a certificate of taxes docketed with the clerk becomes a judgment against the land, and the sheriff sells under execution. A county or municipality has 10 years from the date the taxes became due to start either one, under section 105-378.
Who must be named in a North Carolina tax foreclosure?
In a court action, section 105-374(c) requires the owner of record and the owner's spouse, all other taxing units with tax liens, all other lienholders of record, and everyone entitled to be a party to a mortgage foreclosure in which no deficiency is sought to be made parties and served. The trustee under a deed of trust is not made a party. From filing, the complaint itself is notice of the action, and anyone whose interest is acquired or recorded later is bound as if named.
For the in rem route, section 105-375(c) has the tax collector mail notice to the taxpayer and to the same lienholders of record at least 30 days before docketing. Before execution issues, a person with an interest in the land may ask the clerk to set the judgment aside because the tax was paid or the lien is invalid.
How do upset bids work at a North Carolina tax foreclosure sale?
The commissioner reports the sale within three days. For 10 days after that report, any interested person may file exceptions and anyone may file an increased bid under Article 29A of Chapter 1. Section 1-339.25 in that article sets the minimum: at least five percent over the reported price or last upset bid, with a minimum increase of 750 dollars, plus a deposit of at least five percent of the upset bid, with a 750 dollar floor. Every new upset bid opens another 10 days.
Once 10 days pass with no exception or increased bid, the commissioner may apply for a judgment of confirmation, which directs delivery of the deed on payment of the purchase price. A winning bidder at a commissioner's sale may have been asked for a deposit of up to 20 percent of the bid. Section 105-374(p) also addresses confirmation after exceptions or resales.
An execution sale follows the same idea under a different article. Section 105-375(i) has the sheriff sell as other real property is sold under execution. The sheriff reports within five days under section 1-339.63, section 1-339.64 sets upset bid amounts matching those above, section 1-339.67 says no sale may be consummated until the clerk confirms it, and section 1-339.68 has the sheriff deliver the deed on the clerk's order.
Can the owner redeem after a North Carolina tax sale?
In a court action, section 105-374(e) addresses redemption before confirmation: the person redeeming pays at least all taxes then due to the plaintiff unit, plus penalties, interest and costs, and an answering taxing unit may continue the action until its own taxes are paid, under subsection (h). A redemption between the sale and the order of confirmation also carries the commissioner's fee, which the court fixes at no more than five percent of the purchase price.
On the in rem route, the sale runs under the execution rules, and section 1-339.57 addresses payment of the judgment, costs and the sheriff's charges before the sale or before the upset bid time expires. That is our reading of how those sections fit, for a North Carolina attorney to confirm. After the deed records, section 105-377 bars any action contesting the title, and any motion to reopen the judgment, once one year has passed.
What does a North Carolina tax deed buyer take subject to?
After a court action, section 105-374(k) orders the property sold in fee simple free and clear of all interests and liens, except taxes not yet determinable, taxes and special assessments of units that were not parties, C-PACE assessments, in the court's discretion taxes in other pending tax actions, and conservation agreements. An execution sale buyer under section 105-375(i) likewise takes fee simple title free of other claims, except unpaid taxes or special assessments outside the judgment, C-PACE liens and conservation agreements.
Sale money goes first to costs, then to the taxes and assessments for which the land was sold, under section 105-374(q). Any balance is paid as the court directs or into court for the persons entitled, and a disputed surplus is held for a special proceeding. On an execution sale, section 1-339.70(c) has the clerk pay any surplus to the person legally entitled, holding it for a special proceeding if in doubt.
What a title search checks before a North Carolina tax foreclosure bid
Auction title research reads the court file with images, reports the parties or notices it shows against the owners and lienholders found, lists surviving taxes, assessments and recorded agreements, and reports the report of sale, upset bid and confirmation entries as of the report date. A docketed certificate names only the taxpayer, and section 105-374(c) allows a general description or fictitious names in some cases. Whether a defect in service affects the title is for a North Carolina attorney.
The North Carolina tax deed sale rules on this page, with their sources
Sources: General Statutes 105-355; General Statutes 105-356; General Statutes 105-369; General Statutes 105-374; General Statutes 1-339.64; General Statutes 105-375; General Statutes 105-376; General Statutes 105-377; General Statutes 105-378; G.S. 1-339.25; G.S. 105-369; G.S. 1-339.63; G.S. 1-339.67; G.S. 1-339.68; G.S. 1-339.57; G.S. 1-339.70; G.S. 105-374. Each row links the section it summarizes.
| Rule | What it says | Source |
|---|---|---|
| When the tax lien attaches | On the listing date for the tax year, with penalties, interest and costs attaching at the same time | GS 105-355(a) checked 2026-11-07 |
| Priority | Subject to State tax rules, superior to all other liens and claims, whenever acquired; unaffected by a later transfer, death or bankruptcy | GS 105-356(a) checked 2026-11-07 |
| Advertising the liens | Owner notice at least 30 days before publication; liens advertised between March 1 and June 30 | GS 105-369 checked 2026-11-07 |
| Court foreclosure | An action in the nature of a mortgage foreclosure, in the county where the land lies | GS 105-374(a) checked 2026-11-07 |
| Who must be made parties | Record owner and spouse, other taxing units and all lienholders of record; not the deed of trust trustee | GS 105-374(c) checked 2026-11-07 |
| Complaint as notice | From filing, later purchasers and lienholders are bound as if they were parties | GS 105-374(d) checked 2026-11-07 |
| What a court sale is subject to | Undetermined taxes, taxes and special assessments of non-party units, C-PACE assessments, other pending tax actions at the court's discretion, and conservation agreements | GS 105-374(k) checked 2026-11-07 |
| The auction | Public auction to the highest bidder, generally at the courthouse door; deposit of up to 20 percent at the commissioner's discretion | GS 105-374(m1) checked 2026-11-07 |
| Report and increased bids | Report within three days of sale; exceptions or increased bids within 10 days after the report | GS 105-374(n), (o) checked 2026-11-07 |
| Upset bid, execution sale | At least 5 percent above the last price, minimum increase 750 dollars, each followed by another 10 days | GS 1-339.64(a) checked 2026-11-07 |
| Confirmation and deed | After 10 days with no exception or increased bid, a judgment of confirmation directs delivery of the deed on payment | GS 105-374(p) checked 2026-11-07 |
| Redemption | Before confirmation, by paying at least all taxes then due to the plaintiff unit plus penalties, interest and costs | GS 105-374(e), (i) checked 2026-11-07 |
| Sale proceeds and surplus | Costs first, then taxes and assessments; any balance as the court directs or into court for those entitled | GS 105-374(q) checked 2026-11-07 |
| In rem alternative | A certificate of taxes docketed with the clerk becomes a judgment against the land, bearing 8 percent a year | GS 105-375(b), (d) checked 2026-11-07 |
| In rem notice | Mailed to the taxpayer and lienholders of record at least 30 days before docketing | GS 105-375(c) checked 2026-11-07 |
| In rem execution sale | Execution issues after three months and before two years; the sheriff sells with no debtor's exemption | GS 105-375(i) checked 2026-11-07 |
| What an execution sale buyer takes | Fee simple, free of other liens except unpaid taxes or assessments not in the judgment, C-PACE assessments and conservation agreements | GS 105-375(i) checked 2026-11-07 |
| Setting aside an in rem judgment | Before execution issues, on the ground the tax was paid or the lien is invalid | GS 105-375(f) checked 2026-11-07 |
| Taxing unit as bidder | May bid, assign its bid privately for at least the bid amount, and resell later | GS 105-376 checked 2026-11-07 |
| Time to contest the title | One year from the date the deed is recorded | GS 105-377 checked 2026-11-07 |
| Ten-year limit on enforcement | A county or city must start enforcement within 10 years after the taxes became due; special assessments excepted | GS 105-378 checked 2026-11-07 |
| Upset bid, commissioner's sale | At least 5 percent above the last price, minimum increase 750 dollars, with a deposit | GS 1-339.25(a) checked 2026-11-09 |
| A notice that goes astray | Failure to mail to the correct owner does not affect validity | GS 105-369(b1) checked 2026-11-09 |
| Report after an execution sale | Filed by the sheriff within five days after the sale | GS 1-339.63 checked 2026-11-09 |
| Confirming an execution sale | No sale of real property is consummated until the clerk confirms it | GS 1-339.67 checked 2026-11-09 |
| Deed after an execution sale | The sheriff delivers the deed on the clerk's order and compliance with the terms | GS 1-339.68(a) checked 2026-11-09 |
| Paying before an execution sale is completed | The section addresses payment before the sale or before the upset bid time expires | GS 1-339.57 checked 2026-11-09 |
| Execution sale surplus | Paid by the clerk to the person entitled; held for a special proceeding if in doubt | GS 1-339.70(c) checked 2026-11-09 |
| Answering taxing units | May continue the action until their own taxes are paid | GS 105-374(h) checked 2026-11-09 |
Questions people ask
Does a North Carolina tax deed wipe out a mortgage?
After a court action, section 105-374(k) orders the sale free and clear of all interests and liens except listed taxes, assessments and conservation agreements, and section 105-374(c) has lienholders of record made parties. On the in rem route, section 105-375(c) and (i) require notice to them, and the buyer takes free except as subsection (i) lists.
How much is an upset bid at a North Carolina tax sale?
At a commissioner's sale, section 1-339.25 requires an upset bid to exceed the reported price or last upset bid by at least five percent, with a minimum increase of 750 dollars. Section 1-339.64 sets the same amounts for execution sales, and each new upset bid opens a further 10 day period.
Who sells the property in a North Carolina in rem tax foreclosure?
The sheriff. Under section 105-375(i), execution issues at the tax collector's request after three months and before two years from indexing of the judgment, and the sheriff sells as under other executions, with no debtor's exemption allowed.
Can a county buy property at its own North Carolina tax sale?
Yes. Section 105-376 lets any taxing unit bid at a tax foreclosure sale, assign a winning bid by private sale for at least the bid amount, and later resell the property in the manner provided for its other real property.
How long can a North Carolina tax foreclosure be challenged?
Section 105-377 bars any action contesting title acquired by a taxing unit or private purchaser in a tax foreclosure, and any motion to reopen or set aside the judgment, after one year from the date the deed is recorded.
How far back can North Carolina foreclose for unpaid taxes?
Section 105-378 bars a county or municipality from starting any action or procedure to enforce a tax lien unless it is instituted within 10 years from the date the taxes became due. The limit does not apply to special assessment liens.
More on how North Carolina property law shapes a title search: title research in North Carolina.