As a taxpayer, you may have heard the term “tax lien” before, but do you know what it actually means? In this blog post, we will cover everything you need to know about tax liens in Canada, including what they are, how they work, and what to do if you have one.

What is a Tax Lien?

A tax lien is a legal claim on your property by the Canada Revenue Agency (CRA) to secure payment of unpaid taxes. It is essentially a way for the CRA to ensure that they get paid what you owe them by putting a hold on any assets you own, such as your home, car, or bank account.

How Does a Tax Lien Work?

When you owe taxes to the CRA and don’t pay them, the CRA can file a tax lien against you. This lien gives the CRA a legal right to claim your assets if you don’t pay your taxes. The CRA will typically file a tax lien with the appropriate provincial or territorial land registry office, which will then be publicly available for anyone to see.

If you have a tax lien against you, it can make it difficult to sell your property or obtain credit since the lien gives the CRA a priority claim on your assets. This means that if you sell your property, the CRA will be entitled to receive the amount owed to them before you can receive any proceeds from the sale.

What to Do If You Have a Tax Lien?

If you have a tax lien filed against you, the first thing you should do is contact the CRA to resolve the issue. You may be able to work out a payment plan or negotiate a settlement with the CRA to clear your debt and have the lien removed.

If you are unable to resolve the issue with the CRA, you may need to seek legal advice. A lawyer can help you understand your rights and options and represent you in court if necessary.

Conclusion

In conclusion, a tax lien is a serious matter that should not be taken lightly. If you owe taxes to the CRA, it’s important to address the issue as soon as possible to avoid having a tax lien filed against you. Contacting the CRA and working out a payment plan or settlement is usually the best way to resolve the issue and have the lien removed. If you need legal advice, be sure to speak with a qualified lawyer who can help you understand your options and represent you in court if necessary.