What Are Tax Lien Certificates?
Every year, the government places liens against properties which the owners haven’t paid their taxes on. After a set amount of time - usually years - the property goes up for auction. If this happens, and you win the auction, the government gives you a proof of purchase, which are known as tax lien certificates. Depending on the outcome of the auction, you either own the property outright or you are now the lien holder, and the property owner must pay back taxes plus interest to you. If they don’t pay their back taxes, you become the new owner of the property.