[Read: The Guide for First-Time Homebuyers.] A lien is placed on a property when the homeowner fails to pay annual property taxes to the state or local government. The lien is the amount owed and must be paid in order for the sale or refinancing of the property to go through. Other forms of tax debt can also lead to a tax lien on the property.

How can I get a tax lien removed from my house?

To remove the lien you will need to apply for innocent spouse treatment. This is not a guaranteed removal of the lien but if you can satisfy the IRS that you are indeed an innocent spouse they will remove the lien. The process does take time, perhaps a few months after the application is submitted.

Can a property be sold with a lien on it?

Property with a lien attached to it cannot be sold or refinanced until the taxes are paid and the lien is removed. When a lien is issued, a tax lien certificate is created by the municipality that reflects the amount owed on the property, plus any interest or penalties due. These certificates are then auctioned off to the highest bidding investor.

How does the sale of a tax lien certificate help you?

The sale of tax lien certificates also helps homeowners, because it provides them a time during which they can pay the owed taxes. During the auction process, investors will compete to see who will accept the lowest interest rate or bid the highest premium for the tax lien.

This gives you the right to take the deed of the property if the owner does not pay off the entire delinquent tax amount, plus any fees within the redemption period, typically 120 days. In most cases, the owner has had months, if not years to pay the taxes before the bidding process.

What happens if you have a lien on your home?

If you fail to keep current on your property taxes or other municipal charges, like a sewer or water bill, the past-due amount becomes a lien on your home. All states have laws that allow the local government to then sell your home through a tax lien process to collect the delinquent taxes.

What happens if you don’t pay your property taxes?

If you don’t pay your property taxes (or other municipal charges such as a sewer or water bill), the past-due amount becomes a lien on your home. All states have laws that allow the local government to then sell your home through the tax lien process to collect the delinquent taxes.

Can a property tax lien sale be invalidated?

If you pay the delinquent taxes before the start of the sale, the sale will not take place. Setting aside the sale. If you can’t redeem the home, you might be able to set aside (invalidate) the tax sale after it has occurred by showing, for example: a good reason why you neglected to pay the past-due amounts.