So, what is a tax lien. Well, a tax lien is when real or personal property is attached and used to secure the payment of unpaid taxes. Tax liens may be used for taxes owing on the asset itself or they can be used as a way of "encouraging" taxpayers to pay their delinquent income taxes.
The most common form of tax lien is that placed on real property. Tax liens placed on real property differ from personal property tax liens in that real property tax liens attach to the home. So, if you decide to sell your home, that unpaid and delinquent tax remains with the house after the sale. The new owner will then be responsible for the payment of these overdue taxes.
If taxes are owed on a piece of property, the mortgage lender and the home owner will be served with a notice. You should order a title search if you are considering a real property purchase. Any liens against the real property will be evident on a title search.
Normally, tax liens will be paid out of the proceeds of a real property sale as a closing cost. If this same tax lien is not found prior to the close of the real estate sale, the new owner will be reqjuired to pay the past due taxes.
Sometimes mortgage holders will pay the late taxes when they receive the notice of taxes due and then will invoice the home owner for the amount paid. Mortgage holders will do this to protect their interests because a governmental tax lien outweighs the mortgage payment due to the mortgage holder.
In the event this doesn't happen, there are several different ways to make overdue tax payments in order to remove the lien from the property. The home owner can decide to pay the tax directly. Alternately, the home owner can decide to use an escrow account.
Normally, the home owner will have a length of time in which to pay the back taxes. If the taxes are not paid within this time period, the property can be seized, subsequently sold, and the proceeds used to pay the delinquent taxes.
Income tax and gift tax are examples of two types of tax which might cause a tax lien if not paid. For these types of taxes, federal law will apply. Adversely, state tax liens will be governed by that state's laws. In order not to land in the middle of this kind of situation, it is best to pay any tax when it comes due. Additionally, it is wise to order a title search for any piece of property you are thinking of purchasing. - 31821
The most common form of tax lien is that placed on real property. Tax liens placed on real property differ from personal property tax liens in that real property tax liens attach to the home. So, if you decide to sell your home, that unpaid and delinquent tax remains with the house after the sale. The new owner will then be responsible for the payment of these overdue taxes.
If taxes are owed on a piece of property, the mortgage lender and the home owner will be served with a notice. You should order a title search if you are considering a real property purchase. Any liens against the real property will be evident on a title search.
Normally, tax liens will be paid out of the proceeds of a real property sale as a closing cost. If this same tax lien is not found prior to the close of the real estate sale, the new owner will be reqjuired to pay the past due taxes.
Sometimes mortgage holders will pay the late taxes when they receive the notice of taxes due and then will invoice the home owner for the amount paid. Mortgage holders will do this to protect their interests because a governmental tax lien outweighs the mortgage payment due to the mortgage holder.
In the event this doesn't happen, there are several different ways to make overdue tax payments in order to remove the lien from the property. The home owner can decide to pay the tax directly. Alternately, the home owner can decide to use an escrow account.
Normally, the home owner will have a length of time in which to pay the back taxes. If the taxes are not paid within this time period, the property can be seized, subsequently sold, and the proceeds used to pay the delinquent taxes.
Income tax and gift tax are examples of two types of tax which might cause a tax lien if not paid. For these types of taxes, federal law will apply. Adversely, state tax liens will be governed by that state's laws. In order not to land in the middle of this kind of situation, it is best to pay any tax when it comes due. Additionally, it is wise to order a title search for any piece of property you are thinking of purchasing. - 31821
