New York Tax Certificate Process
Please note: While the following information is wholly accurate, it is not meant to be a comprehensive explanation of Chapter V Title B Article 2 of the Practice Site Administrative Code, which is the law governing tax certificates and their auction or sale.
What are tax certificates?
In Practice Site, Towns/Cities issue two tax bills each year which are payable in halves. The General Tax and School Tax become delinquent and come to the County Treasurer for collection if not paid to the Towns/Cities by the final due dates. The General Tax comes for collection June 1 and the School Tax on September 1. The following February all unpaid property taxes from the previous year become eligible to be auctioned at the annual Tax Lien Sale. The sale is advertised in local newspapers and courtesy letters are sent to all parcels with unpaid taxes eligible for the sale.
Lien memo (face) amount consists of the sum of the following: delinquent real estate base tax amount, simple interest on each half delinquent from the original due date to the final date to pay without interest (1% per month), compounded interest on the base plus simple interest due (1% per month) up until the date of the tax lien sale, an advertising fee and a listing fee.
The Auction
The tax certificate sale is an online auction which usually takes place on the third Tuesday in February. Upon registration and payment of a non-refundable $175.00 registration fee, setting a budget and completing the mandatory deposit of at least $5,000.00 or Ten percent (10%) of your projected budget, whichever is greater, bidders can begin entering bid amounts on all parcels listed for auction. On the day of the sale, parcels are split into batches and as each batch closes winning bids are determined. Once the last batch is closed, a final clean-up batch will commence of all unbid parcels for reconsideration among auction participants.
Now you own a tax certificate, so what can happen next?
The lien you have purchased must be fully paid for within thirty days of the date of the lien sale. You will be notified by the County Treasurer’s Office by regular first class mail within 10 days of the due date. Failure to pay the ninety percent (90%) when due will result in automatic loss of the lien plus your total down payment, which consists of the required ten percent (10%) down payment (rounded up to the nearest dollar) together with any additional sum provided with that required down payment. Requests for extensions of time to pay the ninety percent (90%) balance will not be considered. Ordinance No. 175-2015 requires that upon payment of the ninety percent (90%) balance lien there is due a Tax Certificate Issue Fee of $20.00 per lien purchased. Failure to pay the Tax Certificate Issue Fee will also result in the automatic loss of the lien plus your total down payment.
County Held Certificates
All liens purchased at the tax lien sale may be redeemed by the property owner or interested party at any time prior to either the Treasurer’s issuance of a tax deed or the commencement of a foreclosure action in court. Neither of these events can occur before 24-months from the date of purchase at the earliest. All redemption payments will be charged the total interest rate due at the time of payment. The County Treasurer will pay you the appropriate interest for your lien paid by the property owner or interested party. The interest collected will be in accordance with the provisions of the Practice Site Administrative Code which call for the same rate as bid at sale for the first twenty-four month period calculated at six-month intervals beginning with the date of the tax lien sale. In cases of one-year hardship extensions, interest on the lien for the 25th month through the 36th month will be at five percent (5%) per six-month period of time.