DEFINITION of 'Tax Deed'
A legal document that grants ownership of a property to a government body when the property owner does not pay the taxes due on the property. A tax deed gives the government the authority to sell the property to collect the delinquent taxes and transfer the property to the purchaser. Such sales are called "tax deed sales" and are usually held as auctions where the minimum bid is the amount of back taxes and fees owed.
BREAKING DOWN 'Tax Deed'
In order to acquire a tax deed, the taxing authority, often a county government, must go through a series of legal steps, including notifying the property owner, applying for a tax deed, posting a notice at the property and posting a public notice. The exact steps that must be taken will vary in accordance with local and municipal laws.