Tax Sale Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Tax Sale, written in plain English, along with examples of how it is used.
What is Tax Sale?
It is the sale of the taxpayers property by the government or taxation authorities as a method of collecting the unpaid tax dues on those assets by the taxpayer after the expiry of legally specified time. Certain procedures are followed in order to arrive at a decision of auctioning the taxpayers’ assets by the state government.
History and Meaning of Tax Sale
Tax sale is one of the methods used by the government or taxation authorities to collect unpaid tax debts from taxpayers. The government seizes the property of the taxpayer and sells it at auction. This is done after the expiry of a legally specified grace period in which the taxpayer has been given time to pay their taxes. Non-payment of taxes can result in the government seizing a taxpayer's home, cars, or any other property to pay off the outstanding debts.
Before a house goes up for tax sale, the city and county will notify the property owner of the overdue property tax. The tax deadline will have already passed, and the owner will have been notified by a series of letters from the city or county. If the taxes remain unpaid, the property may go up for tax sale. In some cases, the property owner may still pay the overdue taxes even after the tax sale has been announced.
Examples of Tax Sale
- A homeowner who is unable to pay their property taxes on time is at risk of having their home sold in a tax sale.
- A business owner who has not paid their business taxes may have their company assets seized and sold at auction.
- A landlord who has not paid taxes on their rental properties may have those properties sold in a tax sale to cover the unpaid debts.
Legal Terms Similar to Tax Sale
- Property Lien: A legal claim on a property by a creditor, such as a bank, which must be paid before the property can be sold.
- Foreclosure: The legal process by which a lender seizes and sells a property when the owner fails to make their mortgage payments.
- Levy: The legal seizure of property, including assets in bank accounts, as a means of paying off debts owed by the owner.
- Garnishment: A legal process involving seizure of a person's assets, in which an individual or entity pays money awarded by a court to a debtor instead of directly to the debtor.