Legal Definitions - tax lien

A tax lien is a legal claim that the government has on a property when the owner fails to pay their taxes. This lien gives the government the right to seize the property and sell it to pay off the tax debt.

For example, if a homeowner fails to pay their property taxes, the government can place a tax lien on the property. If the homeowner still does not pay the taxes, the government can sell the property to recover the debt.

It is important to note that a tax lien takes priority over other liens, including mortgages. This means that if a property has a tax lien, the government has the right to sell the property to pay off the tax debt, even if there is a mortgage on the property.

To protect their investment, a mortgage lender may choose to pay off the tax debt and seek reimbursement from the property owner.