What is a Tax Deed?
Real Estate Dictionary
A deed executed by the tax collector to the state, county or city after a period of non-payment of taxes according to statute.
A tax deed is a legal document that grants ownership of a property to a government body or a third party as a result of unpaid property taxes. When a property owner fails to pay their property taxes, the local government may place a tax lien on the property. The government then holds a tax sale, also known as a tax auction or tax foreclosure sale, where the property is auctioned off to the highest bidder.
The tax deed conveys the ownership rights of the property to the winning bidder or the government entity conducting the sale. The winning bidder typically pays the outstanding taxes and any additional fees associated with the sale. Once the tax deed is issued, the new owner gains full legal ownership of the property, subject to any other existing liens or encumbrances.
It's important to note that the specific procedures and requirements for tax deeds can vary by jurisdiction. The laws governing tax sales and the rights and responsibilities of the parties involved are typically established by local government authorities. It's advisable to consult the relevant laws and seek professional advice when dealing with tax deeds or participating in tax auctions.