Tax liens can be categorized by the ways they enter your life. They can affect your ability to retain the property you already own. They can have also a bearing on the way you buy land for sale. It is wise to be aware of either possibility.
Tax Liens on Your Property
Very simply put, if you do not pay your taxes, the government can put a claim on your property. This means that the government entity that holds the lien can prevent you from selling your land when you want to. You would have to pay your back taxes first. You would also have to jump through hoops to get the lien removed from your property. This can be difficult in some cases with a bureaucracy rife with red tape and marked by delays.
The tax lien does not only affect your claims on that immediate property. It can also make it difficult for you to buy land for sale, especially if you go through a bank. Tax liens can damage your credit rating, cause you to have trouble getting a home or car loan, or even affect your ability to get a job if good credit is a requirement. The best solution is to pay your taxes in full and on time.
How to Use Tax Liens to Your Advantage
It is possible for you to buy tax liens from the government agencies, usually counties, holding them. When the counties put the liens on the property, they are staking their claim, but they are not getting any immediate money. In order to make their budgets and payrolls, they sell something called tax lien certificates.
When you buy a tax lien certificate, you are buying out the government’s claim on that property. Either the owner will have to pay you the tax amount, or you will eventually get their property. This is a good way to get property, often with a low investment. Buying tax liens is usually a waiting game, but you should make some money, almost guaranteed, even if you have to put up the land for sale.
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