Overdue Property Taxes in NY: Understanding Your Options and Legal Remedies

Having all your taxes squared away is one of the most freeing feelings a person can have, but many times, the taxes we owe can run away from us. Unlike income taxes, which work on the withholding system, you need to budget, file, and pay your property taxes yourself. Excess admin and financial surprises can often lead to being in arrears.

Unfortunately, delinquent taxes can lead to significant problems. That’s why we’ll tell you all about property taxes in New York, how to handle back taxes, legal remedies, and more. Keep reading to learn everything you need to know.

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Property Taxes in New York

The New York property tax regulations have two percentages you need to know about when calculating your property tax. The first is your assessment percentage (also called a ratio), and the second is the property tax rate (also a percentage).

The assessed value is a percentage of your property’s full market value. For class 1 properties (three-bedroom houses and similar residences), it’s around 6%. For all other property classes, it’s 45%!


Multiplying your property’s market value (say $1,000,000, for example) by your assessment rate will give you your taxable value. So $1 million times 6% gives you $60 thousand. That’s only the taxable value.

You then multiply your taxable value by your class’s tax rate (which is around 20% for class 1 in 2024). $60 thousand times 20% will finally give you what you owe, which would be $12 thousand in our example. Using this method of calculating your property taxes allows you to budget to pay them when they’re due.

Making Payments

If your property is worth less than $250,000 as of the time of writing (2024), your bills will be mailed out, and payments will be due quarterly. Properties worth more than $250,000 only get taxed twice per year.

There is no State-wide tax rate; local governments set their own rates. This means getting your bill well before those due dates is essential so you can budget, file, and pay on time.

It’s important to keep an eye on those due dates and see if anything comes in the mail. If not, ensure that you reach out to your local government to check your property tax status (especially if you think it’s overdue).

What Taxes Pay For

Property taxes go to local amenities and projects. The majority of your parks, libraries, schools, and other similar infrastructure are funded by property taxes. 

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Falling Behind On Your Home Property Tax Bill

New York has some of the highest property taxes and a set of confusing calculations to go with them. Falling behind can happen if you’re too busy to deal with all that math and paperwork or if you have temporary cash flow issues. Unexpectedly inheriting a property and being on the hook for its taxes can also get you into hot water.

Unfortunately, the tax collector will come for their money no matter what led to the situation in the first place. The penalties are small initially but can build up to severe consequences.

Legal Troubles for Getting Too Far Back on Your Taxes

New York State law considers any outstanding amount still owed past the due date “late.” The first penalty the law imposes on unpaid taxes is charging interest and a late payment penalty. The penalty fees aren’t that heavy, but the interest compounds daily, which means it grows incredibly quickly.

The extra charge isn’t the biggest problem for most people. The municipality also gets a lien against your property.

A lien gives someone else the right to claim what you owe them when the property with the lien on it gets sold. It also provides the lien holder the right to apply to the court to foreclose your property.

The court sells the property at auction and hands the outstanding balance to the lien holder. Any money left over after satisfying the debt goes to the court, not the property owner. This prevents people from using the system to get their homes sold for free by accruing a little tax debt.

Legal Solutions

Foreclosure is a severe deterrent, which is why New York law gives you plenty of time and options for extinguishing delinquent property tax. The most important thing to do is to open the dialog with the collections staff and communicate your problem as soon as possible. They’ll tell you about your options, which will generally be better the earlier you start communicating.

Payment Plans

The most convenient route is to get an installment agreement if you want to keep your property. Installment agreements help you pay late property taxes and the interest off within three years. However, there are many rules attached to a payment plan.

Firstly, they require a downpayment. It’s not wise to get the money for the downpayment by borrowing somewhere else, so beware of predatory lenders and scammers.

Secondly, you can’t make a new payment plan if you’ve suffered a tax foreclosure or defaulted on a tax payment plan in the last three years. You’re also barred if there’s another tax lien on any of your properties.

If you don’t qualify, you may yet have luck with a tax relief program.

Direct Cash Sale

Many people don’t wait for the court to auction their properties, opting rather to do it themselves. With a cash sale, this can be quick and convenient, and you get to keep the rest of your money!

A cash sale protects you from many negative financial consequences. You get a massive upfront cash flow injection when you sell a house with back taxes rather than having your cash flow restricted for three years. It also protects your credit record, helping you get into a new home faster.

Don't Let Back PropertyTaxes Get You Down

In summation, property taxes in New York are calculated based on the market value of your property or properties. That means acquiring a new property means you owe more for the tax year.

If you fall behind with your property taxes, you can face legal penalties. Luckily, there are numerous ways of getting out of this mess. You can either make a payment agreement or sell your property with a fast cash sale.

At We Buy Long Island Homes Fast, it’s all in the name. Get the quickest and fairest cash sale today and secure your financial future.

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