شهادة الرهن الضريبي هي وثيقة قانونية تصدرها السلطات الضريبية تثبت أن هناك التزاماً ضريبياً على عقار معين. تستخدم هذه الشهادة في الأغلب كضمان للديون الضريبية التي لم تُدفع من قبل مالك العقار. يمكن أن تؤثر شهادة الرهن الضريبي على قدرة المالك على بيع أو إعادة تمويل العقار، حيث يُعتبر الدين الضريبي بمثابة حق يعود للجهة الضريبية، ويمكن أن تؤدي الشهادة إلى اتخاذ إجراءات قانونية لاسترداد المبالغ المستحقة.

Tax lien certificates are legal documents that allow the holder to collect property taxes owed on a piece of real estate. Interest can accrue on tax lien certificates, making them an attractive investment tool for individuals who choose to buy them.

Definition and Examples of Tax Lien Certificates

Tax lien certificates represent a type of debt secured by real estate. The National Tax Lien Association (NTLA) defines tax liens as “instruments offered for sale by local and municipal governments as a means of recovering overdue tax funds owed on the property due to the owner’s inability to pay the debt.”

In other words, when a property owner fails to pay property taxes, the state or local tax agency can place a lien on the property. This lien prevents the property owner from selling or refinancing the property until the tax debt is paid.

Local and municipal governments issue a tax lien certificate that specifies the amount owed in property taxes, plus any accrued interest or penalties. These certificates can go to auction for investors, allowing governments to collect overdue tax amounts along with interest and penalties.

How Do Tax Lien Certificates Work?

When a property owner fails to pay their property taxes, the tax agency can issue a tax lien certificate. These certificates can then be sold through an auction system.

Tax lien certificates are available for sale at public auctions in only some states. They are usually sold to the highest interest bid or highest cash offer.

When purchasing a tax lien certificate, you assume the responsibility for paying the amount due on the lien, plus any interest or penalties incurred.

Then, when the property owner pays their property taxes, the state or municipality that issued the tax lien certificate pays the original amount plus interest back to you.

Benefits and Risks of Tax Lien Certificates

Tax lien certificates mean different things for homeowners and investors. For homeowners, they can be a problem, whereas investors might see them as a high-risk, moderate-return investment opportunity.

For homeowners, tax lien certificates can be problematic for several reasons. First, if there is a tax lien certificate overdue, it means you will be responsible not only for paying the back taxes but also for the interest and penalties. This can increase the overall cost of owning the property.

Then, and perhaps most importantly, failure to redeem a tax lien certificate by paying off the dues can lead to an eviction proceeding. This means losing ownership and substantial damage to your credit score.

For investors, tax lien certificates can be useful for diversifying a portfolio. From a profit perspective, the returns depend on the interest rate the property owner pays you, and these can be stable.

For example, if you hold a tax lien certificate in a state with a higher maximum interest rate, your investment could yield a good return, especially if the interest rate is higher than what you might earn in an index tracking fund.

However, tax lien certificates can be risky. If the property’s value is less than the owed taxes, the owner may lack the incentive to pay the amount due.

Therefore, you might end up responsible for the foreclosed home, which may not be ideal if it entails additional costs for improving the home to resell it. Tax liens are typically temporary, so the lien holder’s rights to interest and penalties do not last forever.

Source: https://www.thebalancemoney.com/how-to-invest-tax-lien-certificates-4156474