What is a tax deed?

A tax deed is a deed that is used to transfer ownership of a property following a tax foreclosure sale. This occurs when a property owner fails to pay property taxes, leading the government to auction off the property to recover the owed taxes. When the property is sold, the buyer receives a tax deed, which signifies their ownership of the property and the right to take possession.

Understanding the nature of a tax deed is crucial because it highlights the implications of tax delinquency for property owners and investors. In contrast, other options describe different aspects of property taxes or tax-related documents. For instance, a certificate of payment for property taxes merely indicates that taxes have been paid but does not convey ownership. Similarly, documents detailing property tax exemptions or assessments do not pertain directly to the transfer of property ownership. Thus, the role of a tax deed specifically centers on the legal conveyance of title following a tax sale.