Tax Foreclosure in New York: What Homeowners Need to Know
A guide from AuctionBlock.org
New York State has two very different systems for handling delinquent property taxes, depending on where you live. In New York City, unpaid property taxes and certain other municipal charges are sold to a tax lien trust. In most counties outside of New York City, local governments use in rem foreclosure — a court proceeding that can transfer ownership of your property to the county. Understanding which system applies to you is the first step in protecting your home.
This guide explains how tax foreclosure works in both New York City and the rest of New York State, what programs exist to help you, and what steps you can take to prevent losing your property.
How Property Tax Collection Works in New York
Property taxes in New York are collected by the local tax collector — which may be a city, town, village, county, or school district depending on where you live. Tax bills are typically issued annually or semi-annually, with due dates varying by municipality.
In New York City, property taxes are collected by the NYC Department of Finance. The tax year runs from July 1 to June 30, and taxes can be paid quarterly (July 1, October 1, January 1, April 1) or semi-annually, depending on the assessed value of the property.
New York City: The Tax Lien Sale
New York City sells tax liens through a process authorized by the NYC Administrative Code § 11-319 et seq. Here is how it works:
How the NYC Tax Lien Sale Works
1. Delinquency threshold: A property becomes eligible for the lien sale if property taxes, water/sewer charges, or certain other municipal charges have been delinquent. The specific threshold amounts and delinquency periods are set annually by the City Council.
2. Notice: Before the lien sale, the NYC Department of Finance mails notices to property owners, publishes a list of affected properties on its website and in newspapers, and provides opportunities for homeowners to resolve their debts before the sale.
3. The sale: NYC has historically sold tax liens in bulk to a tax lien trust. The trust pays the city for the liens, and the trust then has the right to collect the delinquent amounts from property owners plus interest.
4. Interest rate: The trust charges interest on the outstanding lien. For residential properties, the interest rate is set by the Administrative Code. Check with the NYC Department of Finance for current rates and thresholds.
5. Foreclosure: If the homeowner does not pay off the lien, the trust can begin foreclosure proceedings after a waiting period.
Protections from the NYC Tax Lien Sale
Certain properties may be exempt from the lien sale. The City Council has enacted protections that may apply to:
- Properties owned by people 65 years of age or older who have applied for and received the Senior Citizen Homeowner Exemption (SCHE)
- Properties receiving the Disabled Homeowner Exemption (DHE)
- Properties enrolled in a Department of Finance payment agreement and in good standing
- Properties meeting other criteria set by the City Council resolution authorizing the annual sale
Important: The specific exemption criteria can change from year to year based on City Council action. Contact the NYC Department of Finance to confirm which protections apply in the current year.
NYC Department of Finance: Call 311 (within NYC) or (212) 639-9675 (outside NYC), or visit nyc.gov/finance.
Upstate and Suburban New York: In Rem Foreclosure
Outside of New York City, most counties use in rem foreclosure to collect delinquent property taxes. This process is governed by Article 11 of the Real Property Tax Law (RPTL § 1100 et seq.).
How In Rem Foreclosure Works
1. Delinquency: After property taxes become delinquent, they are typically returned to the county for collection by the county treasurer or finance department.
2. County lien: The county has an automatic lien on the property for unpaid taxes from the date the taxes become due (RPTL § 902).
3. In rem foreclosure petition: After a period of delinquency (which varies by county — check with your county treasurer), the county can file an in rem foreclosure petition in county court or Supreme Court. This is a proceeding against the property itself, not against the property owner personally.
4. Notice to the homeowner: The county must send notice to the property owner by certified mail and first-class mail, publish notice in a local newspaper, and post notice on the property. (RPTL § 1125)
5. Redemption period: After the petition is filed, you have a redemption period — set by the county and the court — to pay all delinquent taxes, penalties, interest, and costs. The deadline is stated in the notice you receive.
6. Court judgment: If you do not redeem, the court enters a judgment transferring ownership to the county. The county may then sell the property at auction or transfer it to a land bank.
Important — Tyler v. Hennepin County: The U.S. Supreme Court ruled in Tyler v. Hennepin County (2023) that government entities cannot retain surplus proceeds from tax foreclosure sales that exceed the debt owed. This ruling has significant implications for New York's in rem foreclosure system. If your property is worth substantially more than the taxes owed, you may have a right to the surplus. Consult with a legal aid attorney.
The STAR Program (School Tax Relief)
New York's STAR program provides property tax relief by reducing the school tax burden on qualifying homeowners. There are two versions:
Basic STAR
- Available to owner-occupied primary residences
- New applicants register with the NYS Department of Taxation and Finance and receive STAR benefits as a credit (check or direct deposit) rather than as an exemption on the tax bill
- Reduces school tax costs for qualifying homeowners
- Income limit: Household adjusted gross income must be $500,000 or less
- Register at tax.ny.gov or call (518) 457-2036
Enhanced STAR
- Available to homeowners 65 years of age or older
- Provides a larger benefit than Basic STAR
- Income limit: Income must be at or below the threshold set annually by the state — verify the current limit at tax.ny.gov as it is adjusted periodically
- Must be renewed annually through income verification
- Apply through your local assessor's office or register at tax.ny.gov
(Source: Real Property Tax Law § 425)
Other Programs That May Help
NYC Department of Finance Payment Agreements
If you owe back property taxes in New York City, you can enter into a payment agreement with the NYC Department of Finance. Payment agreements allow you to pay your delinquent taxes in installments. Entering into a payment agreement — and staying current on it — can protect you from the tax lien sale.
Contact 311 (in NYC) or visit nyc.gov/finance.
Senior Citizen Homeowner Exemption (SCHE)
- Available to NYC homeowners 65 years of age or older
- Income limit: Combined annual income of all owners must be at or below the threshold set by the city — verify the current limit at nyc.gov/finance
- Reduces assessed value by 5% to 50% depending on income
- Important: Receiving SCHE may exempt you from the tax lien sale
Apply through the NYC Department of Finance or call 311.
Disabled Homeowner Exemption (DHE)
- Available to NYC homeowners with disabilities
- Must have a disability determination from the Social Security Administration or equivalent federal agency
- Income limits and benefits are similar to SCHE
- Important: Receiving DHE may exempt you from the tax lien sale
Apply through the NYC Department of Finance or call 311.
Veterans Exemptions
New York offers several property tax exemptions for veterans under RPTL §§ 458, 458-a, and 458-b. These exemptions reduce assessed value based on wartime service, combat zone service, and disability. Contact your local assessor's office.
New York Homeowner Assistance Fund (NY HAF)
New York received federal HAF allocations under the American Rescue Plan Act. The program has provided assistance for delinquent property taxes, mortgage payments, water/sewer arrears, and other housing costs. Check current availability at nyhaf.org or call (800) 566-8577.
County-Level Payment Plans
Outside NYC, many counties offer installment agreements or payment plans for delinquent property taxes. Contact your county treasurer or finance department to ask about options. Act before the in rem foreclosure petition is filed — your options are better the earlier you reach out.
Legal Aid Resources in New York
If you are facing tax foreclosure in New York, these organizations provide free or low-cost legal assistance:
New York City
- Legal Aid Society: (212) 577-3300 or legalaidnyc.org
- Legal Services NYC: (917) 661-4500 or legalservicesnyc.org — serves all five boroughs
- Mobilization for Justice (formerly MFY Legal Services): (212) 417-3700 or mobilizationforjustice.org
- New York Legal Assistance Group (NYLAG): (212) 613-5000 or nylag.org
Upstate and Long Island
- Legal Aid Society of Northeastern New York: Serves the Capital Region and surrounding counties. (518) 462-6765 or lasnny.org
- Legal Aid Society of Mid-New York: Serves central NY counties. (315) 793-7000
- Legal Assistance of Western New York (LawNY): Serves western NY counties. (585) 325-2520 or lawny.org
- Nassau Suffolk Law Services: Serves Long Island. (631) 232-2400 or nslawservices.org
Statewide
- New York State Homeowner Protection Program (HOPP): Free housing counseling statewide. (800) 566-8577
- LawHelpNY: Statewide legal information and referral. lawhelpny.org
- New York State Bar Association Lawyer Referral Service: (800) 342-3661
Emergency Steps If You Are Facing Tax Foreclosure
Whether you are in NYC facing a tax lien sale or upstate facing in rem foreclosure:
- Do not ignore any notices. Every notice represents a deadline. In rem foreclosure notices include a specific redemption deadline — missing it can mean losing your home.
- Contact your tax collector immediately — the NYC Department of Finance (call 311) or your county treasurer — to find out the exact amount owed and what payment options are available.
- If you are in NYC, ask about entering a payment agreement with the Department of Finance. Being in good standing on a payment agreement can protect you from the lien sale.
- If you are 65 or older, apply for Enhanced STAR and (in NYC) SCHE. These can reduce your tax bill and, in NYC, may protect you from the lien sale.
- If you have a disability, apply for DHE (in NYC) or contact your local assessor about disability-related exemptions.
- If you are a veteran, contact your local assessor about veterans exemptions under RPTL §§ 458, 458-a, and 458-b.
- Call a legal aid organization listed above. Tax lien foreclosure and in rem proceedings have specific legal defenses.
- Check whether the New York Homeowner Assistance Fund has available funds at nyhaf.org or call (800) 566-8577.
- Contact a HUD-approved housing counseling agency: Find one at hud.gov/findacounselor or call (800) 569-4287.
- Document everything — keep copies of all tax bills, lien sale notices, court filings, payment receipts, and correspondence.
Need Help?
If you are a New York homeowner facing property tax difficulties and you are not sure where to start, we can help you understand your options and connect you with resources in your area.
Visit auctionblock.org/get-help to connect with us.
You are not alone. There are programs designed to help you keep your home — but you have to take the first step.
Important Disclaimer
This guide is educational information only. It is not legal advice, tax advice, or financial advice. Laws and program rules change. Always verify current program requirements, deadlines, and eligibility thresholds directly with the relevant government agency before making any decisions. AuctionBlock.org is a mission-driven company providing educational resources about foreclosure prevention. We are not a law firm, not a tax preparation service, and not a government agency. Consult with a qualified attorney or HUD-approved housing counseling agency for advice about your specific situation.
Published by AuctionBlock.org, a mission-driven company dedicated to foreclosure prevention for vulnerable families.
Last updated: March 21, 2026