Did you know that there are 3,836 tax lawyers in the U.S.?
A tax lien on your home is standard practice for unpaid property taxes. For the homeowner, taxes may never be paid, but knowing your property is affected is enough knowledge to avoid signing any property deeds until the tax lien is resolved.
More often than not, a tax lien benefits the homeowner. See below to learn what is property tax liens.
What Are Property Tax Liens?
Property tax liens are essential to ensuring that local governments can raise revenues to fund public services. When a homeowner fails to pay their property taxes, a lien is placed on their commercial property, giving the government the right to collect the outstanding amount plus interest. By placing a lien on a property, the government can secure its right to collect taxes owed.
Not only does a lien give the government a legal way to collect taxes, but it also serves as a deterrent for people not paying their taxes in full. Without a lien, more people would likely not pay their taxes in full, putting a strain on the local government’s resources.
Process of a Property Tax Lien Filing
A Property tax lien filing is triggered when the taxpayer fails to pay property taxes due. Upon filing a Tax Lien, the creditor takes legal title to the property until the taxpayer can pay the lien amount plus applicable fees.
The Property Tax Lien can be sold for cash to a lien investor who will pay the outstanding property taxes. This payment releases the lien and allows the taxpayer full title to the property.
Property Tax Liens can be profitable for a lien investor because they can be sold for cash with a legally enforceable real estate lien. If you need help with this process, look for the best commercial real estate tax attorneys.
By demystifying the implications of the Property Tax Lien Filing Process, one can better understand the financial risks associated with failure to pay taxes and strategies to redeem the lien.
The Rights of Property Tax Lien Holders
A lienholder has the right to collect the amount due from the property owner and other housing costs, such as insurance and utilities. They also have the right to foreclose on the property should the outstanding tax be unpaid.
It is essential to understand that any prospective buyers of the property may be required to satisfy the lien before closing on the sale, which should be considered when entering into a real estate transaction. As with any real estate transaction, it is important to consult legal counsel for sound advice. Demystifying property tax liens and their implications is beneficial to property tax lien holders to protect their rights and maximize their returns.
Learning About Property Tax Liens
Property tax liens can seem intimidating but do not have to be. You can demystify property tax liens with the right resources and knowledge and understand their financial implications. Take the first step and get informed today.
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Rosette has a knack for anything DIY. She spent her younger years learning about the different hardware tools, lighting, and equipment in the hopes of establishing a hardware business in the future. Her career options may have changed, but today, she continues to write so passionately about her first love.