Sell a House With Back Taxes or Tax Liens in New York

This page is general information about New York, not legal, tax or financial advice. Laws and local rules change, and every situation is different. Talk with a New York attorney, tax professional or HUD-approved housing counselor about your own circumstances.

How unpaid property taxes work in New York

New York homeowners usually pay several tax bills: town and county taxes, school taxes, and sometimes village or city taxes. When a bill goes unpaid, the amount becomes a lien on the property, and interest and penalties keep adding up.

In most of the state, counties collect delinquent taxes through an in rem tax foreclosure under Article 11 of the Real Property Tax Law. Unpaid town and school taxes are typically turned over to the county, and the county’s finance office (the Commissioner of Finance in Orange and Dutchess Counties) or treasurer (in Ulster County) handles collection. Some cities collect and enforce their own taxes. Generally, a county can begin a foreclosure proceeding after taxes have gone unpaid for about two years, and owners have a chance to redeem by paying everything owed before the deadline in the court notice.

If the deadline passes, the county can take title to the property and sell it at auction. Since 2024, New York law has let former owners claim surplus money left over from a tax-foreclosure sale. But the claim process takes time, and many owners recover far less than they would by selling the house themselves first.

Your options if you’re behind

• Pay the balance or ask the county about an installment agreement, which some counties offer to eligible owners.
• Check exemptions such as STAR, senior citizen or veterans exemptions, which may lower future bills if you qualify.
• Sell before the foreclosure is final. Back taxes, interest and penalties are paid from the sale proceeds at closing, and you keep the rest.

Other liens we can work with

Back taxes often come with other problems: unpaid water and sewer charges added to the tax bill, judgment liens, mechanic’s liens, or state or federal tax warrants. The title company finds these in its search and gets payoff amounts, and they’re paid from the proceeds at closing. If the liens add up to more than the house is worth, it may be possible to negotiate some of them down, and we’ll be upfront about whether a sale makes sense.