what is a tax lien certificate 
a tax lien certificate is a claim against a property that s had a lien placed upon it as a result of unpaid property taxes tax lien certificates are generally sold to investors through an auction process understanding tax lien certificatesa tax lien can be placed on a property because the owner hasn t paid property taxes the county or municipality will issue a property tax bill each time property tax comes due and it will eventually issue a tax lien if the bill isn t paid the lien is removed when the owner pays the taxes but the municipal or county authority will eventually auction the lien off to an investor if they continue to go unpaid a certificate is issued to the investor detailing the outstanding taxes and penalties on the property after they ve placed a winning bid the investor will then pay the taxes on behalf of the property tax owner but now they have the lien rather than the government 1not all states counties or municipalities offer tax liens 1 some states such as california only hold tax sales on defaulted properties resulting in the winning bidder becoming the legal owner of the property in question 2the term of tax lien certificates typically ranges from one to three years the certificate enables the investor to collect the unpaid taxes plus the applicable prevailing rate of interest during this time the rate can range from 6 up to 24 depending on the jurisdiction 3tax lien certificates can be bid on and won based on the highest cash amount the lowest interest rate or another method 