One of the first questions that I had when learning about tax liens was how they were different than tax deeds. It seemed like everything I read in a book, online, or in a newspaper mentioned both of these terms, but few of them seemed to explain what the differences were between the two terms.
Therefore, I thought that it would be nice to contrast the two. A tax lien is basically defined as either 1) A claim imposed by the federal government to liquidate a person's property so that the owed taxes and other fees can be paid in full, or 2) a type of lien placed on a property title when the owner has not paid property, assessment, or other state and federal taxes. A tax deed on the other hand, is defined as a "deed on a property issued to the purchaser where the property is sold at a public sale for nonpayment of real estate taxes."
Both tax liens and tax deeds can be valuable as a part of a real estate investment portfolio or strategy, and as time moves on we will discuss the differences, advantages, and disadvantages that each has to offer the savvy investor.
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