Tax Sale

Written By
Paul Tracy
Updated November 11, 2020

What is a Tax Sale?

A tax sale is a sale of property by a taxing authority.

How Does a Tax Sale Work?

For example, let's say that John owns a home and he owes $4,000 in property taxes. A year and a half goes by, and John doesn't pay the taxes. If he is unwilling or unable to pay his taxes after a certain amount of time, the taxing authority will seize his property and sell it in a tax lien foreclosure. The taxing authority uses the proceeds from the sale to pay the taxes owed.

Why Does a Tax Sale Matter?

Tax sales almost always involve real estate, and they're almost always used for recovering unpaid taxes. An entire cottage industry has sprung up around tax lien sales because the taxing authority is generally able to sell the properties for little more than the amount of taxes owed.

Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Tax Sale.
Be the first to ask a question

If you have a question about Tax Sale, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Tax Sale, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Tax Sale

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms