Center for New York City Neighborhoods: What You Need To Know About Tax Liens

Since 1996, the New York City Department of Finance has held a tax lien sale where they sell the overdue debt of New Yorkers to third-party debt collectors. Those collectors then tack on high fees, profiting from New York homeowners that are financially struggling. Because of the pandemic, the lien sale didn’t happen in 2020—but according to the agency, that may not be the case in 2021. 

Attorney General Letitia James has already spoken out about the inequity created and sustained by the tax lien sale. In a 2020 letter to Mayor Bill de Blasio and Council Speaker Corey Johnson, James said the sale fuels “the displacement of long-time homeowners and tenants, the destabilization of neighborhoods, and the transfer of wealth from homeowners to lenders and property speculators.”

On the sale date, a private debt collector purchases lien debt, made up of late property taxes, utility bills, and other unpaid bills. Once the lien is sold, the buyer adds fees and interest which then compounds, worsening the debt. This often punishes people already struggling to pay their taxes and bills.

For small family homes, a tax lien is sold if a homeowner has sustained a debt of at least $5,000. For 2-3 family homes, a water or sewer lien of at least $3,000 can also be sold.

Although the sale did not happen in 2020, homeowners who have not removed themselves from the tax lien list are risking higher debt burdens and foreclosure. Do your due diligence to ensure that your bills are in good standing, because the lien sale can be reinstated at any time after August 2021. If you need help, call the Center for New York City Neighborhoods at 646-786-0888 or go to to be connected with a free, nonprofit housing counselor.