Tax lien

A tax lien is a legal claim placed on a property when the owner fails to pay property taxes. This lien serves as a guarantee for the payment of the owed taxes, and it must be cleared before the property can be sold. The lien remains attached to the property and affects any transactions involving it. If the property taxes remain unpaid, the taxing authority has the right to foreclose on the property and sell it at auction to recover the amount due, including interest and penalties. Investors purchasing properties with a tax lien can acquire them at a reduced price, often without settling the existing mortgage, providing an opportunity to buy at a lower cost.