Getting Your Home Back After a Property Tax Sale in New York

Overdue property taxes in New York state become a lien on the property which could result in the homeowner eventually losing title to the house.

If you don’t pay your real property taxes in New York, the overdue amount becomes a lien on your property and you could eventually lose ownership through a tax foreclosure. Fortunately, under New York law, you get some time to “redeem” the home by paying off the delinquent amounts before you permanently lose it.

Tax Foreclosures in New York

If you get delinquent on your property taxes in New York, the officer with authority to collect taxes can initiate a foreclosure by filing a petition with the court. The foreclosing party must publish notice of the foreclosure in a newspaper and mail you a notice letting you know that the foreclosure has started. The court will enter a judgment and transfer title of your home directly to the tax district or sell it at an auction. (To get details on the tax foreclosure process in New York, see  What Happens If I Don't Pay Property Taxes in New York.)

Your Right to Redeem the Home in a New York Tax Foreclosure

In New York, you can prevent the loss of your home to a tax foreclosure by “redeeming” it. To redeem the home, you’ll have to pay the amount of the delinquent tax lien or liens, including all charges authorized by law (such as penalties, interest, and costs), before the redemption period expires (N.Y. Real Prop. Tax Law § 1110).

When Does the Redemption Period Expire?

Generally, the redemption period expires two years after the lien date -- that is, the date when the tax or other legal charges became a lien on the home (usually the first day of January of the fiscal year) (N.Y. Real Prop. Tax Law § § 1102, 1110).

When the redemption period is extended.  The redemption period may be longer than two years after the lien date if:

  • the tax district provides a longer period to redeem (such as three or four years) (N.Y. Real Prop. Tax Law § 1111) or
  • the published notice of foreclosure specifies a later date for the redemption period to expire (N.Y. Real Prop. Tax Law § 1110).

Additional redemption deadlines.  New York law also permits you to redeem until:

  • the 30th day after the notice of foreclosure is mailed, or
  • the date specified by the notice of foreclosure as the last day for redemption, whichever is later (N.Y. Real Prop. Tax Law § 1125).

Hiring counsel.  New York’s laws on when you can redeem your home in a tax foreclosure are complicated. To find out the deadline for redeeming your property in a New York tax foreclosure, it is recommended that you consult with an attorney.

You Might Be Able to Pay in Installments

If your tax district allows it, you may be able to pay off your delinquent taxes over a period of time by entering into an installment agreement.

How installment agreements work.  The term of the agreement cannot be longer than 24 months (or 36 months if the agreement is made prior to December 31, 2015). You’ll have to make a down payment, though no more than 25% of the eligible delinquent taxes (N.Y. Real Prop. Tax Law § 1184).

When you can’t enter into an installment agreement. You’re not eligible to enter into an installment agreement if:

  • there is another delinquent tax lien on your property (or on another property you own) and that lien is not eligible to be part of the agreement
  • you lost another property to a tax foreclosure within the past three years, or
  • you defaulted on a tax installment agreement in the past three years (N.Y. Real Prop. Tax Law § 1184).

Ways You Might Be Able to Get Your Home Back After a Tax Foreclosure

If you lose your home to a tax foreclosure, you might be able to get it back by taking one of the following legal actions.

Filing a motion to reopen the default judgment.  If you don’t redeem or file an answer to the lawsuit, you might be able to reopen the default judgment. (A default judgment occurs when you don’t respond to a lawsuit.) To do this, you must file a motion stating the reasons why the judgment should be reopened (for example, there is a good reason why you failed to respond to the suit) no later than one month after the court enters its judgment (N.Y. Real Prop. Tax Law § 1131).

Asking the court to set aside the tax deed.  In some situations, you may be able to invalidate a tax foreclosure and the resulting tax deed that gave title to a new owner. For example, if you were not given proper notice of the foreclosure, you can ask the court to set aside (invalidate) the deed. You must start the proceeding to object to the deed within two years after the tax deed is recorded (N.Y. Real Prop. Tax Law § 1137).

Hiring counsel.  If you want to reopen a default judgment or set aside a tax deed, your best bet is to consult with an attorney who can help you with this.

Where to Find New York’s Tax Foreclosure Laws

To find the tax foreclosure statutes for New York, go to § § 1100 through 1194 of the  New York Real Property Tax Law.

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