You finally purchased the home of your dreams in the city and city living is everything you dreamed it would be. Except– those pesky property taxes are so expensive! If you can’t pay property taxes in New York City, learn what options are best for you and how you can overcome this tough hurdle.
If you don’t pay your property taxes, the taxing authority could sell your home to satisfy your debt. Or, your mortgage lender might pay the taxes itself and then bill you. If you fail to reimburse the mortgage lender, it can foreclose on your home.
Failing to keep up with the property taxes on your New York home can lead to a tax foreclosure. Here’s how a New York tax foreclosure works: When you don’t pay the taxes, the delinquent amount (which includes the accrued taxes, interest, penalties, and costs resulting from the delinquency) becomes a lien on your home. A lien is a legal claim on your property. The taxing authority can then foreclose the lien to collect the overdue amounts. In New York, the tax foreclosure procedure is similar to the mortgage foreclosure process. If you don’t respond to the lawsuit by filing an answer that lists your objections to the case, the court will enter a default judgment against the property. Then, either the tax district gets possession of the property directly or an auction is held to sell it. If you are struggling to pay the property taxes on your home, you could be at risk of losing your home to foreclosure or a tax sale. However, there are several things you can do to either reduce the amount of property tax that you have to pay or to buy yourself some extra time to get caught up on your property taxes.
One thing you can do to reduce the property taxes you must pay is to challenge the assessed value of your home. (Remember, the property taxes are primarily based on your home’s assessed value.) All states have specific procedures for challenging the assessed value of the home. Typically, you’ll need to dispute the value shortly after you receive the bill. To prevail in your challenge, you must show that the estimated market value placed on your property is either inaccurate or unfair. Also, some states require that you pay the bill before making the appeal.
Be sure to follow the procedures otherwise you might lose the appeal. Check the tax assessor’s website online or review your property tax bill to learn about the specific procedures, as well as what sort of documents and evidence you’ll need, to make your challenge to the value the assessor placed on your home.
Each state has property tax abatement (reduction) or exemption programs that allow certain homeowners to reduce the amount of property tax they must pay based on age, disability, income, or personal status. For example, older homeowners and veterans often are entitled to a reduction of their property taxes. Ordinarily, you’ll have to apply for the abatement and provide proof of eligibility. In some states, abatement isn’t possible if you’re already delinquent in your tax payments. However, you may qualify for a deferral (where you’re allowed to postpone paying the taxes if you meet eligibility requirements), or a repayment plan. In addition, many states permit the taxing authority to compromise on the amount of taxes that are due or to waive penalties and interest.
Facing the potential to lose your home to foreclosure because you can’t pay property taxes in New York City is a terrifying thing, but there are options available. I offer free consultations to people who might lose their home. Click here to contact me. I am happy to assist in any way that I can to make the property tax process a little clearer.