A tax lien is a government claim against real property for unpaid taxes. It is one of the most powerful types of liens in real estate because it carries "super-priority" status — meaning it takes precedence over virtually all other liens, including first mortgages, judgment liens, and mechanic's liens, regardless of when those other liens were recorded. This super-priority exists because the government's ability to fund essential public services depends on reliable tax collection.
Tax liens can arise from several sources. Property tax liens are the most common — imposed by counties and municipalities when annual property taxes go unpaid. Federal tax liens are imposed by the IRS when a taxpayer owes unpaid federal income taxes, payroll taxes, or other federal obligations — these attach to all property the taxpayer owns, not just real estate. State tax liens work similarly for unpaid state income taxes. Special assessment liens arise from unpaid local improvement assessments.
If property taxes remain unpaid for an extended period, the local government can take action to collect. In some jurisdictions, the government sells the tax lien to private investors through a tax lien sale — the investor pays the taxes and receives a certificate earning interest until the property owner repays the lien (plus interest and penalties). In other jurisdictions, the government may sell the property itself through a tax deed sale — transferring ownership to the highest bidder, which can wipe out the former owner's rights entirely.
The title search identifies all tax liens, and they must be paid at or before closing. At Beycome Title, we verify tax status directly with the county tax collector for every transaction — checking not just the current year but prior years as well. We ensure all taxes, penalties, and interest are properly calculated and paid from the seller's proceeds, delivering clear title to the buyer.
Use Beycome's property tax calculator to estimate annual taxes for any property, or get your free closing quote that includes accurate tax prorations.