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What Is a Tax Lien?

November 15th, 2012 · No Comments

A tax lien refers to a state exactly where a lender can restrict, encumbers or secure property. This takes place when the property proprietor fail to pay tax in timely fashion. The failure to pay tax grants the government the right to impose the lien on personal or real property for delinquent tax which may include income, estate or gift tax. Tax liens are a variety of from a tax levy in which government can seize property and sell it in buy to recover taxes. It is rather common to hear about tax lines in connection to unpaid taxes on specific property However there are other organizations such as the income income Service which can use lien as the starting point for collecting earnings taxes that have not been paid.

basically liens can be present against both present or future property; this includes any earnings that you may earn in future. If the liens continue on against the property either present or future it can end result in seizure of property to recover tax if they remain unpaid. In most situations tax liens which emanates from income tax end results in seizing of income through future earnings. In most countries faltering to pay taxes on property grants the state a right to seize it. different countries have various methods of dealing with tax defaulters. In some countries the law only grants the state a right to hold the property until finally the taxes are paid. Alternatively the state may only be allowed by law to hold the property for a particular period of time before selling it; this offers the defaulter a chance to make money in arrangement to pay the taxes. If the sale of the property does not result in full payment of the tax lien the state can seize property which is not associated with the items for which taxes are owed.

Individuals getting property should enquire if the property has unpaid taxes before acquiring it. purchasing property which has a tax lien means that you will be accountable for spending the unpaid dues. Property owners who sell property with unpaid taxes usually signs a release form which shows that the new owner will assume duty of having to pay the taxes. It is a good idea to seek the assistance of a reputable real estate agent so as to be sure that you deal with any tax issues regarding the property you intend to buy before acquiring it.

traders with a keen eye can benefit from acquiring property with a tax lien as long as they agree to purchase the lien. Properties with tax liens are often considered low risk investments exactly where you are likely to end up with property for only a fraction of the value it is worth or earn a relatively high interest rate for your investment. This usually occurs if the proprietor of the property does not redeem the tax lien which ends up selling at a low rate. When you take up the proprietorships of the property then you will be free to put it on sale at the market value thus creating a decent revenue from a relatively small investment. Most of the investors involved in tax liens travel to public auctions exactly where they acquire property which is not redeemed, this can be both a part-time or full-time business.

Learn how to buy tax liens in Georgia and Colorado tax liens through the leading tax lien site

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