What Is a Tax Lien Sale?
A tax lien sale occurs when a municipality sells the right to collect unpaid property taxes to a third-party investor. The investor pays the municipality the amount of the delinquent taxes, and in return, they receive a lien certificate that entitles them to collect the taxes — plus interest — from the property owner. If the owner does not pay within the redemption period, the lien holder may be able to foreclose on the property.
In New York City, the Department of Finance conducts an annual lien sale that includes properties with at least one year of delinquent property taxes or three years of delinquent water and sewer charges. The process is different outside NYC, where most counties use in rem foreclosure rather than lien sales.
The NYC Tax Lien Sale Process
The NYC tax lien sale follows a defined annual calendar. The city publishes a list of properties eligible for the lien sale, typically in the spring. Property owners receive notice and have until the sale date to pay their delinquent taxes and be removed from the list. After the sale, the lien holder sends a notice of sale to the property owner, and the redemption period begins.
During the redemption period, you can pay the lien amount plus interest and fees to clear the lien. The interest rate charged by lien holders in NYC is capped at 18 percent per year. If you do not redeem, the lien holder can initiate foreclosure proceedings after the redemption period expires.
How to Redeem Your Property
Redemption means paying the full amount owed — including the original tax debt, interest, penalties, and any fees charged by the lien holder — to clear the lien from your property. In NYC, you can redeem through the Department of Finance or directly with the lien servicer. Outside NYC, contact your county treasurer's office.
If you cannot pay the full amount, ask about installment plans. NYC offers payment agreements for homeowners who demonstrate financial hardship, and many counties offer similar programs. The key is to act before the redemption period expires — once it does, you lose the right to reclaim your property.