In the priority of liens, which lien has the highest priority?

• A. State taxes
• B. Property taxes & special assessments
• C. Mechanics liens
• D. Federal taxes

Answer: (D)

Liens against real estate are prioritized by a combination of statutory rules and public policy, with some claims treated as senior because they fund essential government services. The top priority goes to ad valorem charges that attach to the property to support local government operations—property taxes and any special assessments. These liens attach directly to the property and remain enforceable regardless of who owns it, so they’re paid first from any sale proceeds. After those, other liens, including mechanics’ liens, are generally subordinate to the property tax lien and follow the order determined by how and when they were created. Federal tax liens are broad and powerful, but in standard priority rules they come after the property tax lien has been satisfied. So, in typical real estate priority, the highest priority among the options is the lien for property taxes and special assessments.