Definition
A tax lien is a government's recorded legal claim against a property for unpaid property taxes. Property tax liens generally take priority over even your mortgage, meaning the county gets paid first, and if left unresolved long enough, the county can eventually sell the lien or move toward selling the property itself to collect what's owed. For a homeowner, a tax lien has to be paid off or officially released before a sale can close, but this is a routine part of many closings and doesn't need to derail your plans to sell. The key is addressing it early rather than letting it grow, since interest and penalties continue to accrue the longer taxes go unpaid. A property tax lien generally takes priority over almost every other lien on the property, including the mortgage, which is why lenders escrow taxes and why an unpaid tax bill escalates faster than most other debts. The lien attaches to the parcel rather than the person, so it follows the property to the next owner if it is not cleared at closing.
Example
Tom fell three years behind on his county property taxes after a stretch of unemployment, racking up $9,700 in unpaid taxes and penalties along the way. He kept meaning to catch up once he found steady work again, but the balance kept growing faster than he expected. Worried the county would eventually move toward a tax sale, he decided to list the house rather than wait any longer for his finances to fully recover. When he found a buyer, the title company simply paid the county directly out of his closing proceeds and recorded the lien's release. The sale went through without further complication, and Tom walked away with the remaining equity instead of losing the house to collection. He said knowing the lien wouldn't stop the sale took a huge weight off his shoulders. At the settlement table the mechanics are simple: the title company obtains a payoff from the taxing authority, pays it from proceeds, and the release is recorded. The complication is only ever timing — payoff figures change as interest accrues, so they are quoted good through a specific date.