Fatwa

Tax Lien

Question

Is tax lien Haram? It is basically in the USA if people dont pay property taxes investors can pay those taxes for them but they have to repay the investor the exact amount. If they do not pay in time or at all the property goes to the investors. So is that haram? It is 100% legal

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

A tax lien is a legal claim against the assets of an individual or business that fails to pay taxes owed to the government. In general, a lien serves to guarantee payment of a debt such as a loan, or in this case, taxes. If the obligation is not satisfied, the creditor may proceed to seize the assets.[1]

Islamically, in the event an asset is seized, the creditor may only collect what is due to him. Any surplus funds have to be returned to the original owner.[2] Therefore, it is not permissible for the investors to claim the entire property (assuming the value of the property exceeds the taxes due) in the event the taxes are not paid on time.

And Allah Ta’āla Knows Best

Mufti Bilal Pandor

Concurred by
Mufti Muhammad Patel

Darul Iftaa Mahmudiyyah
Lusaka, Zambia

www.daruliftaazambia.com

[1] Tax Lien: Meaning, How to Resolve With IRS (investopedia.com)

الهداية في شرح بداية المبتدي (4/ 432) [2]

“وإذا حل الدين وهو على صفة القيمة استوفى المرتهن منها قدر حقه”؛ لأنه جنس حقه “ثم إن كان فيه فضل يرده على الراهن”؛ لأنه بدل ملكه وقد فرغ عن حق المرتهن “وإن نقصت عن الدين بتراجع السعر إلى خمسمائة وقد كانت قيمته يوم الرهن ألفا وجب بالاستهلاك خمسمائة وسقط من الدين خمسمائة”؛ لأن ما انتقص كالهالك وسقط الدين بقدره، وتعتبر قيمته يوم القبض فهو مضمون بالقبض السابق لا بتراجع السعر، ووجب عليه الباقي بالإتلاف وهو قيمته يوم أتلف