If you’re an NY resident and own a property. Understanding your tax obligation is compulsory. We hear a common question at Tax King: “Does New York State charge interest on back property taxes?” And the answer is definitely yes. To avoid any complications, you must pay your property taxes on time.
It is also important to avoid tax penalties and interest rates. Let’s understand how these charges work in New York and how our tax preparer NY can help you in the process. So that you can meet your tax obligations and avoid costly surprises with assurance.
What happens if you don’t pay property taxes in New York?
If you fail to pay your property taxes in New York, it can lead to serious consequences. You could even lose your property to foreclosure. If property taxes are unpaid, they become delinquent. Then, the state will take steps to collect the owed amount.
Penalty Rates for Unpaid Tax Payments:
The interest rate for unpaid taxes is 1% per month. Penalty rates can differ by location, such as cities or counties. This interest starts from the first due date or any part of that month. New York State Real Property Tax Law does not allow skipping interest and penalties on late payments. The government must pass an executive order or special law to change this.
Late Payment Notice: If you don’t pay your taxes, you’ll usually get a late payment notice. This notice tells you about the overdue amount and any extra charges that keep adding up. It’s vital to respond to these notices immediately.
Tax Liens and the Risk of Foreclosure
If you don’t pay your property taxes or bills, like water and sewer, your property might go to a tax lien sale.
What is a tax lien?
A tax lien can be defined as a legal claim on your property. It happens when you don’t pay municipal charges, like taxes, plus interest. In a lien sale, the city or county sells this debt to an authorized buyer due to unpaid charges of the Department of Finance. But the lien buyer can now collect the money you owe, along with extra charges and interest. For properties valued over $250,000, the interest rate is 18% per annum.
Note: After the property sells for unpaid taxes, the lienholder charges interest, not the Department of Finance.
If you don’t pay your debt to the lienholder, they can start foreclosure in court. This carelessness can lead to the sale of your property at auction, which would result in the loss of your home.
Foreclosure Notice:
New York State law requires that property owners get a “Homeowner Warning Notice” before foreclosure starts. This notice warns them about the risk of losing their home. It also provides details about housing counseling agencies.
If you have received the foreclosure notice, you can still consult us to get tax extensions. Our certificate tax extension experts will help you apply for tax extensions and explore possible solutions to prevent foreclosure.
When is It Too Late to Stop Foreclosure?
Many people wonder when it’s too late to stop foreclosure. It’s possible to stop foreclosure before you’ve received a Notice of Default or a Notice of Sale. The important thing is timely action and seeking expert advice.
If you are looking for a “foreclosure attorney near me,” we are right here. Tax King Inc. will explain your legal rights and options.
Keep in mind: Pre-foreclosure homes show how others tackled similar problems. But keep in mind, each case is different. The Tax King foreclosure attorney in New York can help. We know the laws and procedures specific to your state.
Act now, don’t wait for the auction date!
The sooner you act, the better chance you have of saving your home.
How To Avoid Property Tax Issues:
Stay on top of your property taxes, by following these precautions can help you avoid property tax issues.
- Pay tax on time: Always pay tax by your property tax due date.
- Manage your balance: If you can’t pay full payments, many state tax authorities offer payment plans. Let the Tax King help you find a way out. We will represent you in front of local tax authorities to negotiate financial arrangements.
You can also use this step-by-step guide to find a reliable tax advisor in NYC to get consultation.
Need help? If you’re facing financial problems and want the NY estate tax exemption for 2025, Tax King Inc can help. We offer the right tax services to lower your taxable value.
FAQ’s
New York home prices generally come out quarterly or monthly. Whereas, the first look value of your property comes out on May 1 and the final value on July 1.
The Department of Finance usually sends out property bills two to four times a year. They may mail them or post them on the website.
- Quarterly property tax delinquent dates are July 1, October 1, January 1, and April 1.
- Semi-annual property tax delinquent dates are July 1 and January 1.
If tax payments are not made by the due date, the result is interest or a penalty. The state or local government charges taxpayers a penalty for unpaid tax from the due date until they pay the tax. It’s crucial to pay property tax.
Moreover, if you don’t pay your property taxes or bills, this will lead to a legal claim of a tax lien and the risk of foreclosure.
In NYC, the state collects property taxes in arrears. Which means you are paying for the period that has already passed.
Yes, you can sell a house in foreclosure. It’s best to sell it before the foreclosure sale happens to pay off the debt and save your credit.
The annual interest rate structure for properties, effective July 1, 2025, to June 30, 2026, is as follows:
Property values below or less than $250,000 will have a 6% penalty rate. The values between $250,000 and $450,000 will pay 9% interest, and 16% for the properties above $450,000.
