Tax Lien Investing Glossary

A Latin term meaning "according to value," describing taxes calculated as a percentage of a property's assessed value — the basis for property taxation.

The dollar value assigned to a property by a local tax assessor for the purpose of calculating property taxes.

An auction format where investors compete by accepting progressively lower interest rates on a tax lien certificate, with the lowest bidder winning.

A document issued to an investor at a tax sale confirming their purchase of a tax lien or tax deed and detailing the terms of the investment.

Property taxes that remain unpaid past the due date, which may result in penalties, interest, and eventually a tax lien being placed on the property.

The research and investigation process an investor conducts before purchasing a tax lien or tax deed to evaluate the property and assess risk.

Any claim, lien, easement, or restriction on a property that may affect its use, transferability, or value.

The price a property would sell for on the open market between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts.

The most complete form of property ownership, granting the owner full and unconditional rights to use, sell, or transfer the property.

The legal process by which a lienholder forces the sale of a property to recover the debt owed when the property owner fails to pay.

A legal provision that reduces the assessed value of a primary residence for property tax purposes, lowering the tax bill and affecting lien amounts.

A lien that has lower priority than a senior lien, meaning it is paid after higher-priority liens are satisfied in the event of a property sale or foreclosure.

A legal claim or right against a property that serves as security for a debt or obligation owed by the property owner.

A public notice filed in court records indicating a pending lawsuit involving the title to or interest in a property. Check for lis pendens during due diligence.

Tax liens or tax deeds that were not sold at public auction and are available for purchase directly from the county or taxing authority.

An auction format where investors bid amounts above the base lien value, with the premium paid typically being non-refundable and non-interest-bearing.

A comprehensive report containing key information about a property including ownership, assessed value, tax history, liens, and physical characteristics.

A lawsuit filed to establish clear ownership of a property and resolve any disputes or claims against the title.

A tax deed sale where the original property owner retains the right to buy back the property within a specified redemption period.

The legally defined timeframe during which a property owner can reclaim their property by paying the delinquent taxes plus interest and penalties.

The legal right of a property owner to reclaim their property after a tax sale by paying the full amount of delinquent taxes, interest, and penalties.

A special type of tax sale for properties with taxes delinquent for multiple years, often offering properties at deeply discounted prices.

An individual retirement account that allows investment in alternative assets like tax liens and tax deeds for potential tax-advantaged returns.

The practice of paying subsequent property taxes on a property where you already hold a tax lien certificate, adding to your total secured investment.

Additional property taxes that become due after the initial tax lien certificate is purchased. Lien holders may need to pay these to protect their investment.

A legal document that transfers property ownership to the government or an investor after the owner fails to pay property taxes for an extended period.

A public auction where the actual ownership of tax-delinquent properties is sold to the highest bidder, transferring the deed to the winning investor.

A public sale conducted by a government entity where investors can bid on tax lien certificates for properties with unpaid taxes.

A legal document issued by a government authority when a property owner fails to pay property taxes, granting the certificate holder a lien on the property.

An examination of public records to verify a property's legal ownership and identify any liens, encumbrances, or other claims that may affect the title.