Property-tax debt, which grows at 12 percent a year, can provide revenue to a municipality with a long view on collection, and the possibility that it could take the property in foreclosure proceedings.
That’s what is done in Putnam and Rockland counties, and in every Westchester municipality except Yonkers, where tax liens are sold each year to investors. They buy the debt, pay off the back taxes, and then have a continuing claim on the property, with interest rates as high as 12 percent.
My Tax Watch column this week explores the Yonkers tax-lien sale, and its implications – for both investors, and the city’s bottom line. It certainly helps with the city’s cash-flow: Yonkers sold tax-liens totaling $4.4 million, which is more than 1 percent of the city’s property-tax revenue for 2013.
Photo: Bidders study information on upcoming properties at the tax-lien sale on Wednesday. At left, at the table, is investor Joel Friedberg, of Ardsley. To his left, further back in the room, is real estate broker Henry Djonbalaj. /David McKay Wilson