If you fail to pay your property taxes, the past-due amount becomes a lien on your home. This type of lien almost always has priority over other liens, including mortgages. Generally, when taxes remain unpaid, the taxing authority will eventually sell the lien (and if you don't pay the past-due amount to the lien purchaser, that party can foreclose or use some other method to get title to the home), or sell the property itself in a tax sale. Though, in some places, a sale isn't held; instead, the taxing authority executes its lien by taking title to the home. State law then generally provides a procedure for the taxing authority to dispose of the property, usually by selling it. In other jurisdictions, the taxing authority uses a foreclosure process before holding a sale.
When you don't pay property taxes in New York, the delinquent amount, which includes the accrued taxes, interest, penalties, and costs resulting from the delinquency, becomes a lien on your home. The taxing authority can then foreclose the lien to collect the overdue amounts. If you don't file an answer, the court will enter a default judgment against the property. (A default judgment means you automatically lose because you didn't respond to the lawsuit.) Then, either the tax district gets possession of the property directly, or an auction is held to sell it.
In New York, you'll get some time to save your home from a tax foreclosure. During this time, called a "redemption period," you can pay all delinquent taxes and other charges to stop the foreclosure—a process known as "redeeming" the home. If your tax district allows it, you might be able to pay off your delinquent taxes over time by entering into an installment agreement. And if you lose your home to a tax foreclosure, in rare circumstances, you might be able to get it back by filing a motion to reopen the default judgment or asking the court to set aside the tax deed.
Again, in New York, you can prevent the loss of your home to a tax foreclosure by "redeeming" it. To redeem the property, you'll have to pay the amount of the delinquent tax lien or liens, including all charges authorized by law before the redemption period expires. (N.Y. Real Prop. Tax Law § 1110.)
Generally, the redemption period expires two years after the lien date. (N.Y. Real Prop. Tax Law § 1110.) But the redemption period might be longer than two years after the lien date if:
The foreclosure proceeding generally starts around three months before the redemption period expires. (N.Y. Real Prop. Tax Law § 1124.)
On the flip side, the tax district may reduce the redemption period to one year for residential vacant and abandoned property if the property has been placed on a vacant and abandoned roll, registry, or list prior to the date on which taxes become delinquent in the local municipality. (N.Y. Real Prop. Tax Law § 1110.)
New York law also permits the owner to redeem until:
If your tax district allows it, you might be able to pay off your delinquent taxes over time by entering into an installment agreement. The term of the agreement can't be longer than 36 months. 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.)
You're not eligible to enter into an installment agreement, though, if:
If you lose your home to a tax foreclosure, depending on the circumstances, you might be able to get it back by taking one of the following legal actions.
If you don't redeem or file an answer to the lawsuit, you might be able to reopen a default judgment in rare circumstances. To do this, you must file a motion stating the reasons why the judgment should be reopened, like showing a very 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.)
You might, in some limited situations, be able to invalidate a tax foreclosure and the resulting tax deed that gave title to a new owner. For example, if you weren't given proper notice of the foreclosure, you could 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.)
New York's tax foreclosure laws covering redemption, as well as reopening a default judgment or setting aside a sale, are complicated. To find out the deadline for redeeming your property in a New York tax foreclosure or if you want to reopen a default judgment or set aside a tax deed, you should consult with an attorney, such as a foreclosure lawyer, a real estate lawyer, or a tax lawyer who has experience in property tax matters.
To learn more about property taxes and other aspects of homeownership in general, get Nolo's Essential Guide to Buying Your First Home by Ilona Bray, J.D., Attorney Ann O'Connell, and Marcia Stewart.