What is a 'Tax Lien'?

A 'Tax Lien' refers to a legal claim against a property due to the owner's failure to pay property taxes. When a property owner neglects to meet their tax obligations, the government can place a lien on the property as a form of security for the unpaid tax debt. This claim gives the taxing authority the right to take certain actions, such as foreclosing on the property or selling it to satisfy the unpaid taxes.

Understanding this concept is crucial for anyone involved in real estate, as a tax lien can significantly impact the sale and value of a property. For potential buyers, a property with a tax lien can indicate financial trouble for the seller and may lead to additional legal complications if not resolved before the sale. In contrast, options discussing money held for tax payments or monitoring fees do not accurately encapsulate the essence of what a tax lien represents. Public sales of property due to tax non-payment, while related, focus more on the consequences of an unpaid lien rather than defining the lien itself.