Selling a Home with Tax Liens in Queens NY

If you own property in Queens and you have fallen behind on property taxes, water bills, or have an IRS lien attached to your home, you may believe you cannot sell until the liens are resolved. That is not true. Properties with tax liens are sold in Queens every month. The liens must be satisfied at or before closing, but in most cases the outstanding amounts are paid directly from the sale proceeds through the title company, and you never need to write a separate check.

However, selling a property with liens does require specific knowledge of how different lien types work, how they interact with the title, and how to negotiate with the NYC Department of Finance and the IRS when necessary. This guide covers every type of tax lien you may encounter on a Queens property, how to search for liens on your home, and the exact process for selling with liens in place.

Types of Tax Liens on Queens Properties

Not all liens are created equal. Understanding the type of lien on your property determines your strategy for resolving it:

The NYC Tax Lien Sale Process

New York City conducts an annual tax lien sale in which it sells the right to collect delinquent property taxes, water charges, and sewer charges to a private trust. Here is how the process works and what it means for your property:

Eligibility for lien sale. Properties become eligible for the lien sale when property taxes are delinquent for at least one year, or water and sewer charges are delinquent for at least one year. The city publishes a list of eligible properties approximately 90 days before the sale date, and owners receive written notice.

The lien sale itself. The city sells the lien (not the property) to a trust managed by a private servicer. The trust pays the city the amount owed, and the trust then becomes the lien holder. From that point forward, you owe the money to the trust, not to the city.

Post-sale consequences. Once the lien is sold, the interest rate jumps to 18% per year, and additional fees are added by the trust's servicer. If you do not redeem the lien (pay it off) within the redemption period, the trust can commence a foreclosure action against your property. For residential properties with one to three units that are owner-occupied, the redemption period is generally two years from the lien sale date.

Exemptions from lien sale. Properties owned by seniors (65+) enrolled in the Senior Citizen Homeowner Exemption (SCHE), disabled homeowners enrolled in the Disabled Homeowners Exemption (DHE), and some properties in active bankruptcy or with active payment agreements may be exempt from the lien sale. If you believe you qualify for an exemption, contact the NYC Department of Finance immediately.

How to Search for Liens on Your Property

Before you can resolve liens, you need to know exactly what is on your property. Use these resources:

ACRIS (Automated City Register Information System). Go to the ACRIS website, select Queens County, and search by your address or block and lot number. ACRIS shows all recorded documents including mortgages, lis pendens, UCC filings, and judgment liens. Look for any document labeled as a lien, judgment, or lis pendens.

NYC Department of Finance Property Tax Portal. Enter your borough, block, and lot to see your current property tax balance, any outstanding charges, and whether your property is on the lien sale list. This portal also shows your payment history and any payment agreements in place.

NYC DEP Water Board. Check your water and sewer balance through the DEP's MyAccount portal. Unpaid water and sewer charges are combined with property taxes at the annual lien sale.

Queens County Clerk. Federal tax liens filed by the IRS are recorded with the county clerk. Search the Queens County Clerk's online records for any IRS notices of federal tax lien filed against your name or your property.

Full title search. The most comprehensive approach is to order a title search from a title company. For approximately $250 to $500, the title company will search all public records and provide a report listing every lien, judgment, easement, and encumbrance affecting your property. This is essential before listing a property with potential lien issues.

How to Sell a Queens Home with Tax Liens

The process for selling a home with liens is similar to a standard sale, with additional steps to clear title:

1. Get a title search. Before listing, order a title search to identify every lien and the exact amount owed. No surprises at closing.
2. Calculate your net proceeds. Add up all liens, the mortgage payoff, closing costs, and agent commission. Subtract from the expected sale price. If you have positive equity after all deductions, you can sell conventionally and the liens get paid from proceeds.
3. Contact lien holders for payoff amounts. Get written payoff statements from each lien holder. Payoff amounts often differ from the recorded amounts because of accrued interest and fees. For IRS liens, request a payoff from the IRS Revenue Officer assigned to your case or the Centralized Lien Unit.
4. List and sell the property. Disclose all known liens to potential buyers. In practice, buyers care about the property, not the liens, because the liens are paid off at closing from sale proceeds before the buyer takes title.
5. Liens paid at closing. The title company handles disbursement. Sale proceeds are used to pay the mortgage, then all liens in order of priority, then closing costs, and the remaining balance goes to you.

IRS Federal Tax Liens: Special Considerations

IRS liens are more complex than property tax liens because they attach to all of your property, not just the real estate. When selling a property with an IRS lien, you have two primary options:

Discharge of the lien. You can apply for a Certificate of Discharge under IRC Section 6325(b), which removes the lien from the specific property being sold while leaving it in place on your other assets. The IRS will generally approve a discharge if the sale proceeds are sufficient to pay the lien in full, or if the IRS interest in the property is less than the amount to be paid to the IRS from the proceeds.

Subordination of the lien. If you need to refinance or the buyer's lender requires a clear first lien position, you can apply for a Certificate of Subordination, which moves the IRS lien behind the new mortgage. This is less common in a sale scenario but may apply in certain refinancing situations.

Both applications are submitted on IRS Form 14135. Processing times range from 30 to 60 days, so you must plan ahead. Do not wait until you have a buyer under contract to begin the discharge process, or the closing timeline may not accommodate the IRS processing time.

Negotiating with NYC Department of Finance

The NYC Department of Finance offers several options for homeowners with delinquent property taxes:

Payment agreement. If you cannot pay the full amount at once, DOF offers payment plans allowing you to pay the outstanding balance over time. Entering a payment agreement before the lien sale can prevent your property from being included in the sale. Standard terms allow repayment over one to ten years depending on the amount owed.

Property tax exemptions. If you are a senior citizen (65+), disabled homeowner, or veteran, you may qualify for property tax exemptions that can reduce your ongoing tax burden and potentially reduce the amount owed. The STAR exemption, Enhanced STAR, and veterans exemptions are available through DOF.

Penalty waiver. In limited circumstances, DOF may waive interest and penalties on property tax arrears. This is not guaranteed and typically requires documentation of hardship.

Lien Priority: Who Gets Paid First

When your property sells and proceeds are distributed, liens are paid in a specific order of priority. Understanding this order helps you calculate your net proceeds:

What to Do Right Now

If you have tax liens on your Queens property and you are considering selling, take these steps today:

1. Check your property tax balance on the NYC Department of Finance website. Know exactly how much you owe.
2. Search ACRIS for any recorded liens, judgments, or lis pendens on your property.
3. Order a title search to get the complete picture of all encumbrances.
4. Get a market analysis. Know what your property is worth today so you can calculate whether the sale proceeds will cover all liens and costs.
5. Call (917) 705-0132 for a confidential conversation with Nitin Gadura about your specific situation. He will help you understand your net proceeds and the timeline for selling with liens in place.

The worst thing you can do is ignore the liens. Interest accrues daily, and the NYC lien sale adds 18% annual interest on top of what you already owe. Every month of delay makes the problem worse. In most cases, selling the property and paying the liens from proceeds is the most practical solution, and it can be accomplished within a normal closing timeline of 60 to 90 days.

Nitin Gadura

Licensed NYS Real Estate Salesperson | Gadura Real Estate, LLC

Nitin Gadura regularly assists Queens homeowners with complex title situations including tax liens, IRS liens, judgment liens, and properties facing the NYC lien sale. He works closely with title companies, attorneys, and lien holders to clear title and close sales efficiently.

Supervised by Vinod K. Gadura, Licensed Real Estate Broker, Gadura Real Estate, LLC, 106-09 101st Ave, Ozone Park, NY 11416 | (917) 705-0132