Tax Lien Sale
Since 1996, with rare exception, New York City has sold the liens of properties with unpaid debts, including property taxes, water/sewer bills, and other City charges. Once a tax lien is sold, a third-party collection agency adds fees onto the debt and interest begins to compound daily. (You can learn more about this process here.) The mounting debt can result in an increased financial burden for families who are already behind on their bills, and can even force some homeowners into foreclosure.
How do I get off the lien sale list?
What is a tax lien?
At its most basic, a lien is a legal claim against a property to ensure payment of a debt – in this case, the City places a lien on the property for property taxes, water/sewer bills, and other City charges, allowing the City to recover the owed amounts. Having unpaid liens can cause trouble for homeowners, including the sale of the home.
If you are a homeowner who owes property taxes, water/sewer payments, or have had emergency repairs made by the City, you may be at risk of having a lien on your home sold to a private debt collector, which can ultimately lead to foreclosure.
How does the lien sale work?
In New York City, homeowners pay annual property taxes to the Department of Finance (DOF), as well as monthly municipal water/sewer charges to the Department of Environmental Protection (DEP). Even if a homeowner has a reverse mortgage or is eligible for property tax exemptions, they still must make sure their property taxes and water/sewer bills are paid and apply for their exemptions annually.
If outstanding property taxes, water/sewer bills, and other City charges have not been paid by the lien-sale date, or a payment plan has not officially been initiated, the City can sell the tax lien to a private debt collector if there is no current exemption like the Senior Citizen or Disabled Homeowners Exemption.
Once sold, a tax lien could lead to commencement of foreclosure in as little as six months if the debt remains unpaid or no payment plan is initiated. (It takes far less time to file a foreclosure for an unpaid lien than it does for an unpaid mortgage.)
If you are behind on both your mortgage and taxes, we advise that you contact your mortgage company to discuss how to resolve the arrears and contact us for free assistance.
Am I at risk?
For 1-family homes, a tax lien can be sold if a homeowner has sustained a debt of at least $5,000 and those charges are 3 years overdue. If you only owe water/sewer charges, but not property taxes, the City cannot sell a lien on your property; however, DEP may terminate your water/sewer service if the charges remain delinquent.
For 2-3 family homes, residential condominium units and cooperative (co-op) buildings, a tax lien can be sold if a homeowner has sustained a debt of at least $5,000 and those charges are 3 years overdue. A water or sewer lien of at least $3,000 can also be sold if those charges are 1 year overdue.
For Housing Development Fund Corporation (HDFC) rental buildings, a tax lien can be sold if there is a sustained debt of at least $5,000 and those charges are 2 years overdue. A water or sewer lien of at least $5,000 can also be sold if those charges are 2 years overdue.
How do I get off the lien sale list?
Once a lien sale date is announced, DOF must notify homeowners that their property is at risk of being sold in the lien sale. DOF must send a notice of the home being listed on the lien sale list by mail to the property address, as well as to the registered owner's address (as listed in the DOF system), with notices sent 90, 60, 30, and 10 days before a lien sale takes place.
Even if you do not receive a notice, you may still be on the sale list. (Unfortunately, not receiving a notice does not excuse you from the lien sale.) You should refer to your property tax and DEP accounts to confirm you are up-to-date on your payments and that your home is not set to be included in the lien sale.
If you receive a warning notice from DOF, you should take one of the steps listed below, depending on your particular lien, by May 19, 2025 to get off the lien sale list:
Pay your outstanding property taxes in full to DOF and water/sewer charges to DEP.
Enter into a payment plan. Currently there are three options, including one that can break down your lien into smaller payments over a period of up to 10 years.
Apply for an exemption. Exemptions are available for qualifying homeowners who are 65 years or older, living with disabilities, veterans, and those on active military duty.
Submit an application for the “Easy Exit” program, which allows qualifying homeowners to request removal from the lien sale for one year, provided specific criteria are met. (This application will be available soon. Check back here.)
Submit an Emergency Repair Certification to demonstrate repayment of repair charges incurred by HPD (and billed by DOF) to correct hazardous conditions on the homeowner's property.
How do I defer my property taxes?
DOF’s PT AID Program offers four different plans for deferring your property taxes on one- to three-family homes and condominiums. (To learn more about the PT AID Program and decide which plan is the best for you, click here.) All plans require a maximum federal adjusted gross income of $107,300, and that the property be the homeowner’s primary residence for at least one year:
The Low-Income Senior Plan is for homeowners 65 and older making below the gross income cap.
The Fixed-Term Income-Based Plan is for homeowners making below the gross income cap, and includes only the delinquent amount or the delinquent amount plus charges projected to be due over the next year, while limiting payments to a maximum of 8 percent of a homeowner’s adjusted gross income.
The Extenuating Circumstances Income-Based Plan is for those who have experienced hardships like a property owner’s death, illness, or loss of income.
The Circuit Breaker Plan limits annual payments to 10 percent of a homeowner's adjusted gross income, or $1,500, whichever is higher.
You do not have to be on the lien sale list to enter into a property-tax deferment plan. However, you will need to meet qualifications for each plan. You may only defer a maximum of 25 percent of the equity you have in your one- to three-family home, or up to 50 percent of the equity in your condominium unit. Please refer to the program website for specific qualifications for each plan. You can estimate your payments under these plans with the low-income senior calculator, fixed-term calculator, extenuating circumstances calculator or circuit breaker calculator.
You can apply for these programs online via the Department of Finance’s Customer Service Center, in person at any DOF business center (see www.nyc.gov/ptaid, under ‘Apply in Person’, or call 311), or by mail at NYC Department of Finance, 59 Maiden Lane, 19th Floor, New York, NY 10038.
Submitting a PT AID application will remove your property from the upcoming tax lien sale. However, if your application is not completed within 45 days, your property could be added to either an ongoing or future tax lien sale process.
The PT AID program may not be right for every homeowner, and there are some considerations you should keep in mind before entering into a deferral plan:
Homeowners entering into these plans should note that all unpaid debt accrues interest, which DOF has currently set at 2.5 percent.
Homeowners should also consider that all payment-plan information is listed publicly on the City’s register of real-estate transactions, including the name listed on the property’s deed, if the property has a mortgage, and any other property-related activity.
There is a renewal process, meaning the payment plan will terminate unless you file a renewal application each year. DOF will send you an online link to a renewal and change form (with your current plan information) when it is time for you to renew.
Any unpaid amount plus interest becomes due upon the sale or transfer of the home to new ownership.
Note: You may be eligible to have a defaulted payment agreement reinstated or enter into a new payment agreement if you pay 20 percent down for all charges, interest, and fees owed, or if you have a qualifying extenuating circumstance. Extenuating circumstances are limited to the following four categories:
The death of someone who signed the payment agreement, of any person named on the property deed, or of a contributing household member.
A loss of income to the person who signed the payment agreement, to any person named on the property deed, or to a contributing household member due to an involuntary absence from the property for a consecutive period of six months or more for treatment of an illness, for military service, or under court order.
A loss of income to the person who signed the payment agreement, to any person named on the property deed, or to a contributing household member due to unemployment for any consecutive period of six months or more
Enrollment in the NYC Department of Environmental Protection's Water Debt Assistance Program.
Where can I get help?
Call the City
To deal with unpaid property taxes, you can dial 311 to get connected with a representative from DOF to make a payment, or visit the lien sale website at nyc.gov/liensale to obtain a payment agreement or complete exemption forms.
For water and sewer payments, call (718) 595-7000 to contact the DEP, or visit their website to pay online.
For emergency repair citations, get in contact with the Department of Housing Preservation and Development (HPD) by calling 311 or (212) 863-5526. You can also check a complaint online. (See more about paying emergency repairs charges here.)
Attend an event in your community
The DOF, in partnership with the DEP and HPD, holds outreach sessions in each borough and can provide homeowners on the list with one-on-one assistance to pay arrears, apply for an exemption, or enter into a payment plan. Visit the Help Desk page to find an upcoming event near you.
The Center for NYC Neighborhoods is partnering with City agencies and Council Members at outreach events. Our community-based network partners will be on-site at many of these events with staff who are able to assist with complex lien issues, as well as with more general title and legal help if, for example, you are worried about getting behind on your mortgage.
Talk to your bank/mortgage servicer
Mortgage servicers may offer solutions to help you catch up on property tax and other arrears by paying off an outstanding lien to protect their interest in the property. However, homeowners should proceed with caution before reaching out to the bank and agreeing to any repayment or modification terms.
If you have a lien on your property, your servicer may not yet be aware of it, but once they are, they could pay it off and treat it as an escrow advance, which you would then need to repay over time. This could increase your monthly mortgage payment, so it is critical to ensure the new amount is affordable to you and that you approach the situation knowing your options in advance. For homeowners with a reverse mortgage, unpaid property taxes can trigger foreclosure, as the servicer may advance the payment on your behalf and then demand repayment.
If you have any doubts or concerns about your options, connect with the Center’s Homeowner Helpdesk before proceeding. They can help you access free housing counseling and legal services to understand the best course of action for your situation. Contact us! We are here to help.
For your mortgage servicer’s contact information, check your most recent mortgage statement.
Call us directly
Call 855-HOME-456 to connect with free, quality help.
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