Tax Liens on Homes

Do you know what a tax lien is and how it can affect you as the owner of a new property? Maybe you're looking to purchase a property and want to take advantage of the low prices associated with a tax lien sale?

A tax lien is an order that your local council or municipality will put on your property if you are late in paying your taxes. This means that if you are late in paying your income tax, property tax or personal property tax, you could run the risk of losing your home.

A tax lien is made when all other avenues of recovering the tax you owe have been exhausted. Your local authority will issue the tax lien and will generally put your property up for sale. Even if you have just purchased a new property, you could be liable for unpaid property taxes incurred by the last owner. This is why you always need to check the history of a property thoroughly before you purchase it.

When a council or local authority issues a tax lien on a piece of property, it usually creates a forced sale which any member of the public can benefit from. Generally a tax lien sale is seen as a convenient and affordable way of obtaining property. The sale is made so that the local authority can obtain the money it is owed in unpaid taxes. For people looking to invest in property, a tax lien sale is a cheaper way to buy a house than a regular real estate sale.

When you purchase a property that has a tax lien on it, you can either pay the current owner directly or pay a government agency which is tasked with managing the sale. However, you need to research both the property and the conditions of the sale extensively before signing any agreement. Many tax lien sales are made before buyers are able to view the property. You also need to be prepared to pay for the property in cash and usually within 48 hours of the sale.