Behind on Property Taxes in the Hudson Valley? Sell Before the Tax Sale

Behind on Property Taxes in the Lower Hudson Valley

Falling behind on property taxes here rarely happens all at once. A school tax bill gets paid late one September, then the town and county bill slips the following spring, and before long the interest and penalties are adding up faster than the payments. If your mortgage has an escrow account, the lender usually pays the taxes and adds them to your loan. If the house is paid off, or the loan was a reverse mortgage, or the escrow was dropped, nobody steps in, and the local tax office starts the collection process on its own.

The process is different depending on where the house is. Westchester, Rockland and Putnam do not enforce unpaid taxes the same way, and inside Westchester, each city and town handles its own. This page sorts that out and explains where a sale fits in. It is general information; your receiver of taxes, the county finance department or an attorney can confirm the details for your parcel.

Who Collects and Who Enforces, County by County

Westchester County

In Westchester, the 6 cities and 19 towns bill and collect property taxes, including the county's share, and guarantee the county portion to the county government. That means the county Department of Finance is not the office chasing a late homeowner. Your city or town receiver of taxes is. The county does not hold tax lien sales; some cities and towns do, under the Westchester County Tax Law or their own charters, and a lien sold to a third party can later be foreclosed by the holder. Villages such as Scarsdale, Ossining or Tarrytown bill their own village taxes on top, and school taxes are often billed on their own schedule.

The City of Yonkers, as one example, has a code that provides for selling tax liens and for in rem foreclosure of liens that are at least two years old, with a redemption deadline set at least eight weeks after the foreclosure notice is first published. Other municipalities have their own rules, so ask your receiver exactly which process applies to your property.

Rockland County

Towns in Rockland collect the bill and turn unpaid accounts over to the county, and the Rockland County Department of Finance enforces them under RPTL Article 11. Rockland has passed a local law extending the redemption period for residential property from two years to three years from the lien date; confirm with the Department of Finance that it applies to your tax year. County code also directs finance staff to try to visit occupied homes at least 60 days before a scheduled auction, and provides for an attorney at county expense for resident homeowners who cannot afford one. County-owned tax-delinquent properties are sold at public auction in New City.

Putnam County

Putnam has enforced under RPTL Article 11 since the mid-1990s. Town receivers collect the town and county bill early in the year and then turn the delinquent list over to the county, where the Commissioner of Finance collects and, if the taxes stay unpaid, starts the in rem foreclosure. After a court judgment, the county takes title and holds public auctions, generally at least once a year.

How an In Rem Tax Foreclosure Moves

The lien and the interest

The day taxes go unpaid, the balance becomes a lien and starts accruing interest at the rate set under state law, plus any penalties your municipality charges. Nothing is filed in court yet, and the cheapest time to fix the problem is now.

The petition and the notice

After the redemption period runs, the enforcing officer files a petition and a list of delinquent parcels with the County Clerk, publishes notice in local newspapers and mails notice to owners and others with an interest in the property. The notice sets the last day to redeem.

Redeeming or answering

Up to that last day you can pay everything owed and the parcel comes off the list. If you believe there is a legal problem, such as a defect in notice, you can file an answer. Paying, answering or selling are all actions that have to happen before the deadline, not after.

Judgment and the auction

If no one redeems, the court enters a judgment and title vests in the county or city. The property is usually then sold at auction. Losing a Westchester or Rockland house with real equity over a tax balance a fraction of its value is the outcome everyone involved is trying to avoid.

Surplus After a Tax Foreclosure Sale

For years, New York municipalities could keep the full value of a tax-foreclosed home, even when the taxes owed were small. The U.S. Supreme Court's 2023 decision in Tyler v. Hennepin County held that keeping more than the debt is an unconstitutional taking. New York responded in 2024 (Laws of 2024, chapter 55, Part BB) with a process for the former owner, and sometimes other lienholders, to claim the surplus after the property is sold. It helps, but it comes after you have lost the house, the auction price may be far below market, and the claim has its own deadlines and paperwork. Selling before judgment keeps the whole difference between the market price and what you owe.

Ways to Stop It

• Pay in full. Ask your receiver of taxes (Westchester) or the county Department of Finance (Rockland, Putnam) for a written payoff good through a specific date.
• Ask about installment agreements. State law allows many enforcing officers to offer them, and some localities do. Staying current on one generally keeps the parcel out of foreclosure. Ask before the petition is filed.
• Bankruptcy. A Chapter 13 filing stops collection and can spread the arrears over a plan of three to five years. Talk to a bankruptcy attorney first.
• Sell. If paying is not realistic and the house has equity, a sale pays the taxes at closing and puts the rest in your hands.

Lowering the Bill Going Forward

• STAR: New York's School Tax Relief program lowers the school-tax part of the bill on a primary residence. New homeowners receive it as a credit check from the state (household income limit $500,000); some long-time owners keep it as an exemption on the bill. Check your status at tax.ny.gov.
• Enhanced STAR: a larger benefit for homeowners 65 and older under an income limit that the state adjusts each year.
• Senior and disability exemptions: many towns, cities and school districts offer additional reductions to income-qualified seniors and homeowners with disabilities. The application goes to your local assessor, usually by the taxable status date.
• Grieving the assessment: if the assessment is too high, you can file a grievance on Grievance Day and go to small claims assessment review if needed. Our guide to options when Westchester property taxes are too high covers the steps.

A Tax Lien Is Not a Reason You Can't Sell

People sometimes assume they have to clear the taxes before they can list or sell. You do not. A delinquent tax lien works like a mortgage at closing. The title company orders a search, gets the exact amount owed through the closing date from the receiver or county finance office, and pays it out of the purchase price. The lien is then marked satisfied. Because the house may be on a tax enforcement list, New York's Home Equity Theft Prevention Act may also apply to a sale to an investor, which means a contract with specific notices and a five-business-day right to cancel.

Where to Get Answers

Should You Sell or Try to Catch Up?

If the arrears are a few thousand dollars and your income covers the ongoing bills, catching up is usually the right call, and an installment agreement can make it manageable. A sale makes more sense when the taxes are just one of several problems: the house needs a roof and a boiler, the mortgage is also behind, the owner has moved into assisted living, or the heirs of an estate cannot carry the bills. In those cases, the money that keeps going into interest and penalties could stay with you instead.

Ask yourself three questions. Can I pay the taxes due next year as well as the ones I owe now? Is the house costing more each month than I can sustain? And how close is the redemption deadline? If the honest answers point toward selling, it is better to choose the date yourself than to have a court choose it.

What a Tax-Delinquent Sale Looks Like on Paper

1. We agree on a price based on the house and the market, not on what you owe.
2. Title runs the searches and lists every lien: the tax arrears, any mortgage, judgments and municipal charges such as water or sewer bills.
3. Payoffs come off the top at closing. As an illustration only: on a $500,000 sale with $30,000 in delinquent taxes and a $150,000 mortgage, the title company pays $30,000 to the tax office and $150,000 to the lender, and the rest, less any other liens, goes to you. We pay the seller's closing costs, so those come out of our side.
4. The lien is satisfied and the parcel drops off the enforcement list.

Call (914) 610-7499 with your address and, if you have it, the latest notice from the tax office. We will check where you stand and tell you plainly whether there is time to close before the deadline.