You have bought a property with a tax lien in one of the state’s property tax auction sales. While property tax lien investments can reap lucrative high-interest rates for you, you might wonder if there is a chance that you will eventually acquire the very same property that you invested in.
To answer that question, read this guide to learn more about tax liens and how, if ever, you can own property and evict someone.
Property Taxes and Tax Liens
Maryland, like any other state, raises its revenue through three types of taxes:
- Sales Tax
- Income Tax
- Property Tax
Property taxes are taxes paid by any legal entity such as a person or a corporation on a property owned by that entity. The amount of tax that a property owner should pay depends on the value of the property they own, which should include its land and improvements.
In some instances, however, property owners will fail to submit payment on their property taxes for long periods of time, and local governments and states, such the counties and Baltimore City in Maryland, will seek to remedy this by imposing a tax lien on that property.
If you are looking to invest in owning a property’s tax lien, one possibility that you have is to eventually acquire the property itself and evict its owners. You have to take note, though, that this is not always the case with tax lien investments.
Purpose of Property Tax Lien
While eventually owning a property and evicting an owner by paying the tax lien of that real estate is a possibility, this is not necessarily the purpose of that investment.
A property tax lien enables an investor to acquire high interest from their investments as the property owners are paying them for the lien, their legal fees and expenses, and interest. The only time that the investor can evict a property owner from the home is when the property owner has defaulted from repaying their taxes, interest, and penalties and the tax lien investor has successfully and legally foreclosed on the property and received title. The tax lien foreclosure process is lengthy and technical and requires specialized legal experience like that of the tax lien foreclosure attorneys at LewisMcDaniels.
Notifying the Property Owner of Eviction
After you acquire title to the property through foreclosure and a tax sale deed, the legal process for eviction includes submitting a notification to the property owner that you hold a valid title to their property and that their tenancy is terminated, then filing the appropriate pleadings in the District Court of Maryland for the jurisdiction where the property is located. A Maryland Real Estate Attorney or tax lien attorney like those at LewisMcDaniels can help you in this process.
Hire a Lawyer for Evictions
It is imperative that you understand the laws that surround property tax and real estate, such as evictions. This is to make sure that you don’t cross the line between serving a lawful eviction and breaking the law.