Core Concepts
Tax Lien
A legal claim against a property for unpaid taxes, which in some states the government sells to investors.
Unpaid property taxes automatically become a lien on the property. In tax lien states, the government sells that lien to an investor, who pays the taxes and earns interest when the owner redeems.
If the owner never redeems, the lien holder can eventually seek the property itself, through a foreclosure or a tax deed application, depending on the state.
General information, reviewed 2026-10-12. Not legal advice. Rules change and each county publishes its own sale terms; confirm with the county before bidding.
Related terms
- Tax CertificateThe document a tax lien buyer receives, representing the right to be repaid the taxes plus interest.
- Redemption PeriodThe window during which an owner can keep a property by paying the delinquent taxes, interest, and fees.
- Tax DeedThe document a government issues to transfer a property to the buyer at a tax sale.
- Interest Rate Bid-DownA tax lien auction format where investors compete by accepting a lower interest rate rather than paying a higher price.