What is a "tax lien"?

A tax lien refers to a legal claim against property due to the owner's failure to pay taxes owed on that property. When a property owner fails to pay property taxes, the local government has the right to place a lien on the property to secure the tax debt. This lien ensures that the government will be prioritized in receiving payments should the property be sold or refinanced. The lien remains attached to the property until the debt is satisfied, thereby protecting the government's financial interest in ensuring tax revenues are collected.

Choosing the option defining a tax lien as a legal claim for unpaid taxes affecting property ownership accurately captures the essence of how these liens work. It reflects the legal framework surrounding property ownership and tax obligations, emphasizing that a tax lien can affect the property owner's ability to sell or transfer ownership of the property until the outstanding taxes are resolved.