Mamdani administration to hold tax lien sale in 2027

Mayor Zohran Mamdani will allow New York City to sell property tax debts to private investors in mid-2027, a decision that departs from his campaign pledge to halt the program on his first day in office. City Hall confirmed the administration intends to hold the sale before the current legal authority for the practice expires in 2028.

The city Department of Finance places liens on properties with unpaid property taxes and water bills. Once a debt reaches a specific threshold, typically $5,000 for taxes three years overdue, the city sells these claims at a discount to privately managed trusts. These trusts then attempt to collect the debt and hold the power to initiate foreclosure if payments are not made.

Cea Weaver, director of the Mayor’s Office to Protect Tenants, stated that a standardized enforcement system is necessary for the city's revenue. She argued that delaying the sale further would cause homeowners to fall deeper into debt, making recovery more difficult for the administration.

Richard Lee, the Department of Finance commissioner, said the city will release a list of eligible tax-delinquent owners in late February or early March. This list will provide a 90-day notice before the sale. The mayor’s Public Engagement Unit and nonprofit groups will contact these owners before the list is published to help them establish payment plans.

The 2027 sale will feature stricter eligibility rules than previous years. For two- and three-family homes, the threshold for water and sewer debt has increased from $3,000 to $5,000. Additionally, a property can only face foreclosure one year after the lien sale if the lien value reaches $70,000 or 15 percent of the property value, whichever is lower.

Jakob Kendall Schneider, a senior program manager with the East New York Community Land Trust, noted that his coalition is reviewing the details of the upcoming sale. He maintained that the group's primary goal remains the abolition of trust-based lien sales, stating that the pledge to stop the sale on day one has been effectively passed.

City Council Member Sandy Nurse said the new rules align with recent legislation aimed at eliminating predatory elements of the program. She emphasized that the changes provide more guardrails and offer residents additional opportunities to avoid having their debts sold to service providers.

The city's last lien sale occurred in 2025 under Mayor Eric Adams. That sale included more than 4,500 liens and generated $220 million in revenue. The city's Independent Budget Office reported that an additional hundreds of millions of dollars were collected from homeowners during the notice period. In that cycle, 85 percent of eligible owners avoided inclusion in the sale.

The lien sale program was created by Mayor Rudy Giuliani in 1996 to address property abandonment. It has historically raised an average of $80 million annually for the city. Critics have long argued that the practice disproportionately affects neighborhoods with high populations of Black and Hispanic residents.