Tax Liens

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A tax lien is attached to a piece of property by a government entity for a failure to pay taxes. The lien may be imposed by the federal government, the state, or a municipality. If there is a tax lien on your home, this can present a serious problem for you. Since the federal, state, and local governments are not private lenders, they do not need to follow standard collection policies. At Pulgini & Norton, our real estate attorneys can advise you on how to handle tax liens on a Boston home.

Tax Liens on Homes

In Massachusetts, if you neglect or refuse to pay state taxes after a demand is made, the amount will be a lien in favor of the Commonwealth on your real and personal property. If you owe the Commonwealth taxes and do not pay, the collector will file a Notice of Massachusetts Tax Lien, which attaches to all of your real and personal property and may stop the sale or transfer of the property. This may also damage your credit record.

The notice is recorded at the Secretary of State's Office in Boston and the Registry of Deeds of the county where you live and where your house is situated. Once it is filed, you will be notified of the amount of the lien and the places the notice was recorded. Meanwhile, interest and penalties may keep accruing until you pay off the tax liability.

The lien can extend to property owned by you, even when a third party holds legal title. The lien can continue to attach to real estate until the liability is satisfied, a judgment arising out of the liability is satisfied, or the liability is unenforceable due to the passage of time.

In Massachusetts, a notice of tax lien that is less than six years old as of 2005 must be paid, or it will stay in effect for 10 years after the date of assessment, self-assessment, or deemed assessment. However, it can be extended by various means. For example, the Commonwealth can re-file the notice of lien.

A taxpayer who wants a full release of the lien needs to pay off the lien plus the interest and penalties that have accrued. In some cases, a taxpayer can only pay the taxes in full or partially when the Department partially releases the lien or allows some other lien holder to have priority.

For example, you may need a partial release in order to sell a house so that the proceeds can be used to pay off the government. In such a case, you will need to apply to have the Department partially release the lien. Among other things, you will need to describe the property that is subject to the lien and offer a complete explanation of the request for a release and payment proposal. Typically, you need to offer some money to pay off the lien in part as consideration for the Commonwealth's partial release. The Commissioner who is considering the application may require further documentation, such as an appraisal or documentation related to the distribution of funds when the property is going to be sold or refinanced. Usually, partial releases are not issued unless the fair market value of the property after the issuance of the partial release is at least twice the amount of the unpaid liability that is secured by the lien plus all other liens that have priority to the tax lien.

Discuss Your Property Transaction with a Boston Attorney

There is no requirement under the law for a tax lien or any other lien to be removed before the property is transferred. However, the lien must be cleared if the buyer needs financing or wants clear title. When property is transferred without the lien being paid off, the lien remains on the property. The lawyers at Pulgini & Norton can help Boston residents handle property tax matters. We also represent clients in nearby cities, including Malden, Medford, and Brookline. Call us at 781-843-2200 or contact us via our online form for a consultation.