Tax Lien Certificates Definition – What Is a Tax Lien Certificate?

The most common question Ted hears is “What is a tax lien certificate?” so let’s talk about tax lien certificates definition.

It is truly amazing how many people are not aware of this centuries-old investment vehicle. 


illinois tax lien certificate
Illinois tax lien certificate

The United States is a country where the majority of citizens own real estate, either residential or commercial – more so than any other country in the world.

We have one of the highest concentrations of wealth globally, and the most valuable asset in the majority of investment portfolios is real estate. 

Even though the housing bubble in recent years forced many people out of their homes, real estate ownership is still the goal to which most Americans aspire. 

One of the costs of real estate ownership which cannot be avoided is the payment of taxes.

Imposing property taxes to pay for civil services such as roads, libraries, schools, police and fire departments has been in effect in the U.S. and Canada since the countries became independent over 200 years ago.

These taxes are usually levied annually.

In the U.S. there are over 3,000 counties and over 1,400 municipalities that are classified as tax entities, sometimes called districts. 

Be sure to get the FREE Safe Haven Investor System course (a $197 value) to learn how you can profit from tax lien certificates and tax defaulted property.


What happens if the property tax bill is not paid?

The county government authorities do have remedies. They could repossess the property, but unlike vehicles or other goods, real estate can’t be moved. Instead, the government places a lien on the property. 

A lien is similar to a mortgage, meaning that until the amount due is paid, the property is not owned free and clear.

A delinquent tax lien is considered a senior lien – the government must be paid before any other debtors when the real estate is transferred or sold. 

However, the lien is not beneficial to the municipality because it doesn’t fill their coffers with the money needed to pay for city and county services.

In order to get their money right away, the municipality will offer tax lien certificates for sale to the public. This is usually accomplished with an annual, or more frequent, auction.

When the tax lien certificate is sold, the government collects their revenue, and the property owner receives notice of a lien against their property, giving them time to pay the delinquent bill.

The purchaser of the certificate gets the lien certificate, which is secured by the actual real estate. 

In order to remove the lien, the property owner must pay the amount of the unpaid taxes plus any applicable interest and penalties.

When this revenue is received, the government authority sends a check to the tax lien certificate holder for the face amount plus the amount of interest accrued. 


tax lien certificates definitionSometimes the property owner just doesn’t pay the taxes due, for one reason or another. It may be that the real estate became part of an estate and the heirs don’t want the property – or can’t afford it.

How much time elapses between the taxes going unpaid and the municipality deciding to give up on ever receiving the revenue varies by tax district. 

According to county treasurers across the United States, 95 to 97 percent of all people pay the delinquent tax in 24 months or less. It’s rare that a property owner fails to redeem the Tax Lien Certificate, but it does happen.

Nationwide, every year there are thousands of buyers who end up with property for only the cost of back taxes

If the property owner fails to pay taxes, the tax lien certificate holder is given the property.

In exchange for paying the taxes, the county or municipality sends the tax lien certificate purchaser a deed, giving them the right to keep or sell the real estate. 

If you want to know more about how to make money safely and securely from tax liens and tax deeds, get the FREE Safe Haven Investor System course.


Where can you find tax lien certificates that are up for auction? 

Local governments compile a list of delinquent property owners on a regular basis. This list can be found in one of three places:

  1. The newspaper
  2. Online
  3. A printed list available directly from the government office 

When you obtain the list, you can also get instructions and the date of the next auction of tax lien certificates. 


Are tax lien certificates a good investment? Yes, this investment is safe, secure, and predictable.

Each county has its own rules, but in all cases the tax collector does the work.

There are no commission fees to a broker. You pay the government and your original investment plus interest is reimbursed by the government. You will get paid when the government, in most instances, is paid guaranteed. 


In a nutshell, a tax lien certificates definition is a delinquent tax lien that’s sold to the public by local government in order to collect back taxes.

Tax lien certificates pay high interest rates, even up to 36%, and they’re secured by real estate. Conservative investors love tax lien certificates because they’re predictable, certain, secure and sold by local government.

Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property, can show you how to profit from tax liens. He is famous for teaching newcomers and investors how to earn 6-figure incomes within a year of completing his training.

Ted has a team of guidance facilitators and coaches helping students with research and providing expert answers to questions about tax liens and tax deeds.

Nobody offers support like Ted Thomas, and nobody offers Ted’s full training of home-study courses, personal coaching, live web classes, Q&A sessions, and workshops.

Safe Haven 720x1024 1 1If you want to know more, you can begin your education today, and you can do it absolutely FREE. Ted’s offering his Safe Haven Investor System course (a $197 value) to you as a gift.

Safe Haven is 2 hours of streaming videos and a 100-page illustrated manual that teaches you about tax liens and tax defaulted property, and it costs you nothing. So be sure to get your FREE Safe Haven course today.

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Ted Thomas

Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.

The Ted Thomas Difference:

  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tax defaulted properties for over 30 years.
  • Ted has built a team of certified coaches that have 70 combined years of auction experience and are available to his students by phone to guide and mentor you to avoid getting overwhelmed or worse, losing money
  • Ted has ironclad PROOF that what he is teaching you does work. With hundreds of successful students providing testimonials and a 4.9 Google rating which is unheard of in this industry.
  • Ted and his staff don’t hide behind a website; they can be reached during office hours at 321-449-9940.

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