What is a property tax lien?

Property tax liens are a type of financial claim made against a real estate property. This type of lien is placed on a property when the owner does not pay their property taxes. In North Carolina, the taxation process begins when the property owner is sent a notice of taxes due. If the taxes are not paid when due, the unpaid taxes become a lien against the property. The lien attaches to the title of the property and cannot be removed until the taxes have been paid in full. The property tax lien has priority over all other liens on the property, meaning that the lien holder—usually the municipality—is first in line to receive payment if a mortgage holder forecloses on the property, or if the property owner attempts to sell the property. The lien holder is responsible for collecting payment on the overdue taxes and other fees, such as interest and late fees. If the taxes remain unpaid, the municipality has the right to foreclose on the property and sell it in order to collect the overdue taxes. This is a last resort, however, as it can be a long and complicated process. Property tax liens are important as they encourage property owners to pay their taxes on time and ensure that municipalities can maintain their services. Understanding how property tax liens work is essential for property owners in North Carolina.

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