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What Homeowners Need to Know About Property Taxes

Your responsibility as a homeowner to pay property taxes

All homeowners are legally required to pay property taxes. Some mortgage companies collect extra money as part of each month’s mortgage payment to put into an “escrow account” to pay the property taxes directly, but the taxes remain the legal responsibility of the homeowner. You should receive tax bills quarterly (every three months) from the NYC Department of Finance. You can request copies of your tax bills by calling 311, or going online to http://www.nyc.gov/html/dof/html/contact/contact_emailtaxbills.shtml.

Tax Reductions for Low-Income Seniors, Disabled Homeowners, and Veterans

You may be eligible for lowered property tax bills, but you must re-apply each year for these programs. Call (212) 504-4080, or go to http://www.nyc.gov/html/dof/html/property/property_tax_reduc_taxreductions.shtml. Homeowners who live in their properties (“owner-occupied” properties) are also eligible for the Basic STAR or Enhanced STAR reduction – call 311 for more information.

What Happens if I Don’t Pay My Taxes on Time?

Contesting Charges or Liens: If you believe you have received notice of unpaid taxes or a tax lien in error, you may call the NYC Department of Finance Real Property Tax hotline at (212) 504-4039 to contest the charges or lien.

Repayment Plan: If you fall behind in your property tax payments, you are entitled to ONE chance to enter a repayment plan (also called an “installment agreement”) with the City. You will be required to make an initial down payment; to pay regularly scheduled installment payments on time; and to keep current on future charges. To enter a payment plan with the NYC Department of Finance, call (212) 504-4039. It is very important that you make the scheduled installment payments on time, because if you fall behind, the City will not give you another chance.

Tax Lien Sale: If you fall three years behind in paying your property taxes1 (for one, two, or three-family homes, co-ops or condos)2, the City will probably add up your tax debt, water/sewer charges, and interest into a legal claim called a “tax lien,” and then sell the tax lien to a third party who stands in the City’s shoes and has the right to collect the money you owe. Once this tax lien sale takes place, the company that buys your tax lien (often a company called J.E. Robert, or JER Revenue Services) will have the right to collect your original debt, plus a 5% charge, plus 18% interest,3 and your debt will grow very quickly! Six months after the tax lien sale, the tax lien purchaser can have the right to sue you in court to foreclose on the tax lien and force the sale of your home.4

Therefore, it is extremely important that you respond if you receive a notice of a tax lien sale concerning your property. Usually the best way to respond is to enter into an affordable monthly repayment plan. You may also be able to get help from a program that helps homeowners with low-cost financing:

  • Senior Citizen Homeowners Assistance Program/SCHAP (for seniors), call (212) 431-9700.
  • NYC Office of Housing Preservation and Development/Owner Services/HPD Home Improvement Program/HIP Program (low-interest loans up to $20,000), call (212) 863-5300 or 311.
  • Hebrew Free Loan Society (emergency loans up to $5,000; need two co-signers), call (212) 687-0188.

Always Repay Your Oldest Bills First. The City can begin aggressive collection actions, such as tax lien sales, only after your oldest tax bills become three years overdue. Therefore, if you can’t afford to pay off all your tax arrears at once, you should make sure that the City credits any money you are able to pay towards the oldest bills first.

In Rem Foreclosures: Some properties in extremely poor condition are labeled “distressed properties,” and instead of going through a tax lien sale, the City can put these properties in a process called “in rem foreclosure,” through which the City can inspect, rehabilitate, and/or sell the properties.5

Watch Out for Predatory Lenders!

If you fall behind on your taxes, information about the upcoming tax lien sale and your home will be published in the newspapers. Often, dishonest mortgage brokers and lenders use this information to solicit frightened homeowners and offer “assistance,” usually in the form of very high-cost, high interest rate, and possibly illegal mortgage loans.

MANYFORECLOSURE RESCUE” COMPANIES AND MORTGAGE BROKERS OR LENDERS THAT SOLICIT PEOPLE AT HOME, BY PHONE, OR DOOR-TO-DOOR ARE NOT TRUSTWORTHY. YOU SHOULD NEVER SIGN ANY LOAN PAPERS UNLESS YOU ARE CERTAIN THAT YOU UNDERSTAND ALL THE LOAN TERMS, YOU ARE SURE THAT YOU CAN AFFORD TO REPAY THE LOAN, AND YOU HAVE CONSULTED WITH A TRUSTED ATTORNEY OR NON-PROFIT LOAN COUNSELOR.

Important Contanct Information:

  • NYC Department of Finance (concerning property taxes): (212) 504-4080
  • Department of Finance Senior Citizens’ Tax Lien Ombudsperson: (212) 504-4037
  • NYC Department of Environmental Protection (for water/sewer arrears): (718) 595-7000

Brochures on the tax lien sale process are also available in English, Chinese, Russian, Korean, and Spanish on the Department of Finance website at http://www.nyc.gov/html/dof/html/property/property_bill_taxlien.shtml.

  1. NYC Admin. Code § 11-319 (2004).
  2. Real Property Tax Law § 1802(1) (2002).
  3. NYC Admin. Code § 11-224(g). These are current interest figures as of 3/05. For updated information, please see http://www.nyc.gov/html/dof/html/pdf/03pdf/04_lien_bro_english.pdf
  4. NYC Admin. Code § 11-332.
  5. NYC Admin. Code § 11-401 (2004).

This article was posted March 31, 2007