What is a Tax Lien?
What is a tax lien?
A tax lien is a right of the government, be it local, state, or federal to claim ownership of an item or property that you own in order to obtain tax dollars they feel you owe them. They may take the property or they may just prevent you from selling or transferring the property until they collect the taxes that they are owed. Most commonly tax liens are placed on houses and land.
If you fail to pay the taxes within a certain amount of time the government has the right to seize the property and sell or auction it in order to recover the money owed to them. Liens are most commonly discovered when a person attempts to sell their property and are blocked during the process of the sale due to a lien, at which point the person must pay the taxes or resolve the issue with the government in order to complete the sale.
Often times one can resolve the issue without paying the full amount that the government is requesting because the government weighs the risk of loosing the claim on the property either in court or by the person finding another way around the lien. Tax liens can also be placed on vehicles and other items requiring a title or deed. If a tax lien is subverted or overlooked during the sale of the land on which the taxes are required the lien is passed on to the new owner and they are obligated to pay the taxes. The taxes do not remain with the person who originally failed to pay them.
