Scarlett O’Hara faced financial trouble in Gone with the Wind when taxes on her home were raised to an unaffordable amount. Today, non-payment of taxes can lead to tax sales, including tax lien sales and tax deed sales. Buying a lien can lead to steps such as garnishing wages, while buying a tax deed can result in acquiring property at below-market cost. However, some people have moral qualms about profiting off the misery of others.
Scarlett O’Hara, despite working hard to pay the taxes on her beloved home Tara, gets into big trouble in Gone with the Wind when the taxes are raised to an amount far higher than she can afford. This was a practice occasionally used among carpetbaggers and scalawags after the Civil War; they raised taxes above the level affordable for homeowners to acquire their property by paying those taxes. If Scarlett hadn’t stolen her sister’s boyfriend and married him, she wouldn’t have had the money to pay this new tax and her property would have been sold through the tax sale.
Today, raising taxes arbitrarily is not common. However, non-payment of taxes can lead the government to do everything it can to recover the amounts owed. This results in two types of tax sale, the lien sale and the tax deed sale, and a number of different ways that people can acquire liens or title deeds simply by paying tax (or slightly more) on a property.
A tax sale called a tax lien sale occurs when the government sells the right to assess taxes and take further steps such as property repossession, if a person is unable to meet their back taxes. These can occur on most physical properties, such as cars, boats or houses. Buying a lien can mean you’re given steps like garnishing people’s future wages or issuing a property tax and selling it later to pay back your purchase. If the taxes are still not met, you acquire the right to seize the property.
Equally common is the tax sale referred to as a tax deed sale. This is when the government owed the taxes sells property to recoup its tax payments. For people who own their homes, or have a fair share of equity in them, avoiding tax sales that take away their property is a good idea. Usually, enough notice is given for people to sell property themselves, pay back taxes, or transfer this obligation to a new owner, and still get their principal back.
On the other hand, when a government institutes a tax deed sale, in many cases it has no obligation to sell the property for more than taxes. Numerous people have made significant profits by paying back taxes on property and thus purchasing such properties at well below market cost. Since many have turned it into a profitable business, there may be a number of people who show up at a property auction or bid online to grab themselves properties at low prices.
More people bidding generally means prices go up and in the end it may not be such a great deal. Sometimes, however, there isn’t much interest in the property, and people can acquire it for extremely low rates. It must be said that some people have moral qualms about making money off the misery of others, which is clearly the case in many tax-selling situations, especially when the taxes owed were very low and could have been met with some charity.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
