NYC Tax Lien Sale: How to Get Off the List and 2029 Phase-Out

The NYC tax lien sale is the process by which New York City sells unpaid property tax, water and sewer, and emergency repair debts to a private trust that then collects the money from property owners, with interest, fees, and the eventual power to foreclose. The 2026 sale is currently paused following a March 2026 announcement by Mayor Zohran Mamdani, and the City Council has voted to end the program entirely by 2029.¹ Liens sold in prior years still exist, though, and the rules below still govern how they are collected and how you can protect your home.

Which Properties End Up on the List

Not every unpaid bill triggers a lien sale. The Department of Finance uses set thresholds depending on the type of property and the type of debt.²

One- to three-family homes, condos, and co-op buildings: property tax debt of at least $5,000 that has been unpaid for three or more years.
All other properties (commercial, large multifamily, mixed-use): property tax debt of at least $1,000 that has been unpaid for one year.

Water and sewer charges follow their own rules under NYC Administrative Code § 11-319. For most property types, those charges qualify when they reach $1,000 and have been overdue at least one year. For two- and three-family residential properties in Class 1, the threshold is $2,000.³ Emergency repair charges, incurred when the city has to fix hazardous conditions on your property, are treated as liens on similar timelines.

When a lien is sold, the city adds a 5% surcharge to your outstanding balance plus roughly $300 in administrative costs for advertisements and notices.² The lien is sold to a single authorized buyer, a Delaware statutory trust, not to the public. The city keeps title to the property; the trust buys the debt.⁴

The Notice You Should Get Before the Sale

The city has to publish notice of the sale at least 90 days before the sale date, with a description of every property whose lien may be sold, and again at least 10 days before the sale. The full list is filed with the city register.⁵

Beyond the public notice, the Department of Finance must mail you a separate notice at your address of record. That mailed letter includes your block and lot number, the total amount owed, the amount that would make the lien ineligible for sale, and an estimate of the surcharge and advertising costs that would be added if the lien sells.⁵ If you have moved and never updated your address with the department, you may never see the letter. Update it. That single step protects a lot of people.

How to Get Your Property Off the Sale List

From the day the list is published to the day of the sale, you have several ways out. Which one fits depends on what you can pay and who lives at the property.

Pay in Full

Paying the entire balance is the fastest option. You can pay online through CityPay using your Borough, Block, and Lot (BBL) number, or mail a certified check to the Department of Finance. Once the payment is processed, your property comes off the list. Many owners who receive the 90-day notice pay in full and never see the lien sold.⁴

Enter a Payment Plan

If paying in full isn’t possible, the Department of Finance offers three payment plans:⁶

Standard plan. Up to 10 years, monthly or quarterly. No down payment required, though paying something upfront lowers your future installments.
PT AID (Property Tax and Interest Deferral). For eligible homeowners, this defers all or part of your property tax, or lets you pay a small percentage of income.
Reduced interest plan. Available for Class 1 properties with an assessed value of $250,000 or less, where the property is your primary residence and combined owner income is $200,000 or less.

Interest rates on payment plans for the period from July 1, 2025, through June 30, 2026, run from 2.5% to 16%, depending on your assessed value and whether you qualify for the reduced rate. One rule you cannot ignore: once you’re on a plan, you have to keep up with both the installments and any new charges as they come due. If you fall behind for six months, the agreement defaults, the property becomes lien-sale eligible again, and you cannot enter another agreement on that same property for five years.⁶

Apply for the Easy Exit Program

The Lien Sale Easy Exit Program removes qualifying homeowners from the list for one year while they resolve the underlying debt. To qualify:⁷

You own a one-, two-, or three-family home or condo unit.
The property has been your primary residence for at least 12 months.
You don’t own any other properties in New York City.
The combined annual income of all owners and resident spouses is $107,300 or less.

Apply online through the Department of Finance or on paper at any DOF business center. Decisions are issued within 30 days.⁷ Easy Exit buys you time. It does not erase the debt, so use the year to get on a payment plan or clear the balance.

Claim an Exemption

An exemption can shrink your tax bill enough to bring you under the lien sale thresholds. The Senior Citizen Homeowners’ Exemption (SCHE) and the Disabled Homeowners’ Exemption (DHE) are the most commonly used; you cannot receive both at once. Active military service members can also request relief from the sale directly.⁸ Applications require income documentation and proof of residency and go through the Department of Finance website or a borough office.

If you believe you’re on the list because a payment wasn’t properly credited, get your cancelled checks or bank statements to the Department of Finance as soon as possible. Waiting until the days before a sale leaves almost no time to fix a recordkeeping mistake.

What Happens After a Lien Is Sold

Once the sale closes, you no longer deal with the city. A private servicer working for the lien trust takes over the account. The debt grows from there.

Interest and Fees

The interest rate turns on your property’s assessed value, not the size of the debt:²

Assessed value of $250,000 or less: 5% per year, compounded daily.
Assessed value over $250,000: 18% per year, compounded daily.

At the higher rate, the balance moves fast. The Independent Budget Office has found that owners who don’t repay their lien debt typically see the amount owed double in about three years.⁴ Interest is layered on top of the 5% surcharge added at sale and the roughly $300 in administrative costs, and the servicer may charge its own management fees, all of which stack onto your balance.²

When Foreclosure Can Start

The lienholder can start foreclosure in court one year after the sale date if you haven’t paid the lien in full or reached a payment agreement with them.² Two events can accelerate that timeline: missing a semi-annual interest payment by more than 30 days, or letting current taxes or charges go unpaid for six months while the lien is outstanding.⁹ Owners who assume they have a full year sometimes learn about these triggers only after foreclosure is already filed.

You can stop a foreclosure at any point before the judicial sale by paying the full lien balance with all accrued interest, fees, and surcharges, or by reaching a written agreement with the lienholder.

Surplus Funds if the Property Is Sold

A foreclosure sale often brings in more than the debt owed. In Tyler v. Hennepin County, the U.S. Supreme Court held in 2023 that a government cannot keep proceeds beyond what is owed, ruling the practice violates the Takings Clause of the Fifth Amendment.¹⁰

New York amended its Real Property Tax Law in 2024 to comply. When a tax-foreclosed property is sold, proceeds above the taxes, interest, penalties, and charges owed must be returned to the former owner. The enforcing officer determines whether a surplus exists within 45 days of the sale. For residential properties, if no former homeowner has filed a claim by the time the sale report is confirmed, the proceeding stays open at least three years so you can still come forward.¹¹ File a written claim with the clerk’s office where the sale report is filed as soon as you can after the foreclosure.

What Bankruptcy Does and Doesn’t Do

Filing Chapter 7 or Chapter 13 triggers an automatic stay under federal law, which halts most collection and foreclosure activity right away. A servicer that keeps collecting despite the stay can face sanctions and be ordered to pay damages.

The stay is not the end of the story. A lien trust has a secured claim against your property and can ask the bankruptcy court for permission to resume foreclosure, especially if you fall behind after filing. Chapter 13 can help because it lets you propose a three- to five-year repayment plan that includes the lien debt. Bankruptcy does not erase the lien itself. If the case is dismissed or the plan fails, the lien trust picks up where it left off.

The Pause and the 2029 Phase-Out

Mayor Mamdani’s March 2026 announcement paused the sale for at least six months. A City Hall spokesperson called the existing process “broken” and said it allowed “predatory debt collectors to profit off the backs of working and middle-class homeowners, driving New Yorkers out of their homes.”¹ The administration is reviewing alternatives, including a land bank model and stronger outreach to delinquent owners.

The City Council passed legislation in late 2025 to abolish the lien sale by 2029 and replace it with a land bank structure. The mayor vetoed the bill; the Council overrode the veto in January 2026. Lien sale revenue was left out of the mayor’s Fiscal Year 2027 budget proposal. None of this cancels liens already sold in prior years. If your account is already with a lien trust, the interest rules, foreclosure triggers, and repayment paths above still apply.

1
ABC7 New York. Mayor Mamdani Puts New York City’s Controversial Tax Lien Sale on Pause
2
Department of Finance. NYC Property Tax Lien Sale
3
NYC Administrative Code. NYC Administrative Code Title 11 – Chapter 3
4
New York City Independent Budget Office. Delinquencies For Sale
5
New York City Administrative Code. New York City Administrative Code 11-320 – Notice of Sale to Be Advertised and Mailed
6
Department of Finance. Property Payment Plans
7
NYC Department of Finance. Lien Sale Easy Exit Program
8
NYC Department of Finance. Senior Citizen Homeowners’ Exemption (SCHE)
9
NYC311. Lien Sale
10
Supreme Court of the United States. Tyler v Hennepin County, 598 US 631 (2023)
11
New York State Department of Taxation and Finance. Summary of 2024 Real Property Tax Legislation