(a) For real property with an assessed value of two hundred fifty thousand dollars or less, if an installment of tax due and payable is not paid by July fifteenth, October fifteenth, January fifteenth or April fifteenth, interest shall be imposed on such unpaid amounts.
(b) For real property with an assessed value of over two hundred fifty thousand dollars, if an installment of tax due and payable is not paid by July first or January first, interest shall be imposed on such unpaid amounts.
(c) Interest rates on tax due and payable on or after July first, two thousand five. If the council does not adopt interest rates, the rates shall be (a) for real property with an assessed value of two hundred fifty thousand dollars or less, seven percent per annum; (b) for real property with an assessed value of over two hundred fifty thousand dollars but no greater than four hundred fifty thousand dollars, thirteen percent per annum; and (c) for real property with an assessed value of over four hundred fifty thousand dollars, fifteen percent per annum.
(d) (i) Any tax or part of a tax that became due before July first, two thousand five and remains unpaid after June thirtieth, two thousand five, shall continue to accrue interest until paid at the rate applicable under this section.
(ii) This section shall not apply to interest accrued before July first, two thousand five.
(e) Council adopted rates. By May thirteenth of each year, the banking commission shall send a written recommendation to the council of a proposed interest rate to be charged for nonpayment of taxes on real property. The commission shall consider the prevailing interest rates charged for commercial loans extended to prime borrowers by commercial banks operating in the city and:
(i) for real property with an assessed value of two hundred fifty thousand dollars or less, shall propose a rate at least equal to such prevailing prime rate, except as provided in paragraph (ii) of this subdivision;
(ii) for real property with an assessed value of two hundred fifty thousand dollars or less for which an owner, as defined in subdivision (h) of this section, of such real property: (A) has entered into an agreement pursuant to section 11-322 or 11-322.1 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents or sewer surcharges, and such installment agreement is not in default; and (B) has complied with the requirements described in subdivision (h) of this section, the commission shall consider the most recent federal short-term rate, as determined by the United States secretary of the treasury in accordance with subsection (d) of section 1247 of the internal revenue code, for use in connection with section 6621 of the internal revenue code, and shall propose a rate at least equal to such federal short-term rate rounded to the nearest half percent;
(iii) for real property with an assessed value of over two hundred fifty thousand dollars but no greater than four hundred fifty thousand dollars, shall propose a rate of at least four percent per annum greater than such prevailing prime rate;
(iv) for real property with an assessed value of over four hundred fifty thousand dollars, shall propose a rate of at least six percent per annum greater than such prevailing prime rate.
The council may by resolution adopt interest rates to be applicable to the aforementioned properties and may specify in such resolution the date that such rates will take effect.
(e-1) Report on recommendation. The banking commission's recommendation provided pursuant to subdivision e of this section shall include a report describing the factors considered when determining the recommendation and the rationale for the use of such factors. Such report shall include the interest rate charged for nonpayment of taxes on real property in comparable cities for the two previous fiscal years. Such report shall further include, in a searchable and machine-readable format, sortable by council district, real property tax class, and real property tax sub class, the following information for the current fiscal year and two previous fiscal years, disaggregated by real property with an assessed value of over four hundred fifty thousand dollars, real property with an assessed value of over two hundred fifty thousand dollars but no greater than four hundred fifty thousand dollars, and real property with an assessed value of two hundred fifty thousand dollars or less, provided that such information shall be reported for fiscal years prior to the 2016 fiscal year only to the extent such information is available:
(i) the total tax collected from all real properties subject to taxation within the city, disaggregated by fiscal year;
(ii) the total number of the real properties described in paragraph (i) of this subdivision for which an installment of tax due and payable remained unpaid as of April fifteenth of a fiscal year included in the report, disaggregated by fiscal year;
(iii) the delinquency rate, which shall be calculated by dividing the total number of the real properties described in paragraph (ii) of this subdivision by the total number of the real properties described in paragraph (i) of this subdivision;
(iv) the total amount of real property tax that was not timely paid for the real properties described in paragraph (ii) of this subdivision;
(v) the average amount of real property tax that was not timely paid for the real properties described in paragraph (ii) of this subdivision;
(vi) the total amount of interest accrued on the real property tax that was not timely paid for the real properties described in paragraph (ii) of this subdivision;
(vii) the average amount of interest accrued on the real property tax that was not timely paid for the real properties described in paragraph (ii) of this subdivision;
(viii) the net interest earned by the city, which shall be calculated by subtracting the interest income not earned on real property tax that was not timely paid from the interest income earned on real property tax collected; and
(ix) any other information deemed relevant by the commission.
(f) If the tax rate for any fiscal year of the city is not set by the fifteenth of June preceding the start of such fiscal year, interest shall not be charged for the first installment of tax which is due on the first day of July in such fiscal year if such installment is paid on or before the extended payment date. For this purpose, the term "extended payment date" means the date which falls the same number of days after the first day of July in such fiscal year as the number of days the date such tax rate is set falls after such fifteenth day of June.
(g) For purposes of this section, property held in the cooperative form of ownership shall not be deemed to have an assessed value of over two hundred fifty thousand dollars if the property's assessed value divided by the number of residential dwelling units is two hundred fifty thousand dollars or less per unit.
(h) Requirements relating to charging the interest rate described in paragraph (ii) of subdivision (e) of this section for nonpayment of taxes on real property.
(i) Qualification for such interest rate for certain real property without an application. Real property with an assessed value of two hundred fifty thousand dollars or less shall qualify, for any fiscal year, for the interest rate described in paragraph (ii) of subdivision (e) of this section where an owner of such real property satisfies the following criteria:
(A) such owner has entered into an agreement with the department of finance pursuant to section 11-322.1 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents or sewer surcharges; or
(B) such owner has entered into an agreement with the department of finance pursuant to section 11-322 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents or sewer surcharges, and, for such fiscal year, such owner receives:
(1) an enhanced real property tax exemption pursuant to subdivision 4 of section 425 of the real property tax law or an enhanced school tax relief credit pursuant to subsection (eee) of section 606 of the tax law, provided that the income eligibility for such enhanced real property tax exemption or such enhanced school tax relief credit is no greater than two hundred thousand dollars; or
(2) a real property tax exemption pursuant to section 459-c or section 467 of the real property tax law, provided that the income eligibility for either such real property tax exemption is no greater than two hundred thousand dollars.
(ii) Qualification for such interest rate for certain real property where an application is required. Real property with an assessed value of two hundred fifty thousand dollars or less where:
(A) an owner of such property has entered into an agreement with the department of finance pursuant to section 11-322 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents or sewer surcharges;
(B) such real property has served as the primary residence of such owner for an uninterrupted period of not less than one year immediately preceding the date of the application submitted pursuant to paragraph (iii) of this subdivision; and
(C) the combined income of all the owners of such real property is no greater than two hundred thousand dollars for the income tax year immediately preceding the date of the application required pursuant to paragraph (iii) of this subdivision shall qualify for the interest rate described in paragraph (ii) of subdivision (e) of this section.
(iii) Application. An owner of real property with an assessed value of two hundred fifty thousand dollars or less for which such owner has entered into an agreement pursuant to section 11-322 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents or sewer surcharges, other than any such owner who qualifies for the interest rate described in paragraph (ii) of subdivision (e) of this section pursuant to subparagraph (B) of paragraph (i) of this subdivision, may file an application to demonstrate that such real property satisfies subparagraphs (B) and (C) of paragraph (ii) of this subdivision.
(A) Such application shall be in a form and manner as determined by the department of finance and shall be made available, in downloadable format, on such department's website.
(B) The burden shall be on the owner to establish that:
(1) such real property has served as the primary residence of such owner for an uninterrupted period of not less than one year immediately preceding the date the application required by this subdivision is filed;
(2) the combined income of all the owners of such real property is no greater than two hundred thousand dollars for the income tax year immediately preceding such date; and
(3) any other requirement relating to qualification for the interest rate described in paragraph (ii) of subdivision (e) of this section is satisfied.
(C) The department of finance may require that an owner submit proof that the real property has served as the primary residence of such owner for an uninterrupted period of not less than one year immediately preceding the date an application is filed pursuant to this paragraph. Such proof may include but is not limited to a valid driver's license, the most recent federal or state income tax return, or proof of registration to vote.
(D) Approval and denial of application. If the commissioner of finance determines that a real property for which an owner filed an application qualifies for the interest rate described in paragraph (ii) of subdivision (e) of this section, the commissioner shall approve the application submitted by such owner and notify the owner of such approval. If the commissioner of finance determines that a real property for which an owner filed such application does not qualify for such interest rate, the commissioner shall send to such owner a notice of denial. Such notice of denial may be sent by mail or by electronic means and shall include a reason for a denial. The department of finance shall provide an opportunity for an owner whose application was denied to demonstrate that the real property for which such application was filed served as the primary residence of such owner for an uninterrupted period of not less than one year immediately preceding the date the application was filed, or that the combined income of all the owners of such real property is no greater than two hundred thousand dollars for the income tax year immediately preceding such date. A denial of an application, the failure to send any such notice of denial or the failure of any owner to receive such notice shall not affect such denial, and shall not prevent the levy, collection and enforcement of taxes, including the accrual of any interest and the imposition of penalties on such real property.
(iv) For any real property that qualifies for the interest rate described in paragraph (ii) of subdivision (e) of this section, such interest rate shall be imposed on any taxes due and payable upon:
(A) approval of the application of an owner of such property for an agreement with the department of finance pursuant to section 11-322 or 11-322.1 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents or sewer surcharges, provided that such real property qualifies for such interest rate pursuant to subparagraph (A) or (B) of paragraph (i) of this subdivision; or
(B) approval of the application required by paragraph (iii) of this subdivision.
(v) For purposes of paragraph (ii) of subdivision (e), this subdivision, and subdivision (h-1), the following terms have the following meanings:
Dwelling unit. The term "dwelling unit" means a unit in a condominium used primarily for residential purposes.
Income. The term "income" means the federal adjusted gross income for income tax purposes as reported on an owner's federal income tax return for the applicable income tax year, subject to subsequent amendments or revisions; provided that if no such return was filed for the applicable income tax year, "income" means the federal adjusted gross income that would have been so reported if such a return had been filed.
Income tax year. The term "income tax year" means the most recent calendar year or fiscal year for which an owner filed a federal or state income tax return.
Owner. The term "owner" means an owner of real property or other eligible person, as defined in subdivision (i) of section 40-03 of title 19 of the rules of the city of New York.
Real property. The term "real property" means property classified as class one pursuant to section 1802 of the real property tax law or a dwelling unit in a condominium.
(vi) The commissioner of finance may promulgate rules necessary to effectuate the purposes of this subdivision, including but not limited to, creating a process for an owner to demonstrate continued qualification for the interest rate described in paragraph (ii) of subdivision (e) of this section.
(h-1) Outreach and reporting on interest rate.
(i) The commissioner of finance shall make efforts to conduct outreach necessary to ensure that an owner of real property, for which taxes have been due for at least six months, who is eligible for, or has entered into, an agreement pursuant to section 11-322 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents or sewer surcharges is informed that such owner may be eligible for the interest rate described in paragraph (ii) of subdivision (e) of this section. Such outreach shall include, but not be limited to, providing information about such interest rate in application forms for such installment agreement, sending an annual notice to owners that have entered into such an agreement informing them of such interest rate, prominently posting information about such interest rate on the website of the department of finance, and developing an informational flyer for distribution at all business centers of the department of finance. Such annual notice may be included as part of a notice that the department of finance provides to owners of real property, including, but not limited to, a statement of account required pursuant to section 11-129, or a notice required pursuant to section 11-245.8.
(ii) No later than January 31, 2024, and no later than every January 31 thereafter, the department of finance shall submit a report to the mayor and to the speaker of the council on real property with an assessed value of two hundred fifty thousand dollars or less for which: (A) the owner of such real property has entered into an agreement pursuant to section 11-322 or section 11-322.1 of chapter 3 of this title for the payment in installments of real property taxes, assessments or other charges that are made a lien subject to the provisions of such chapter other than water rents, sewer rents, or sewer surcharges; and (B) such unpaid taxes, assessments or other charges were subject to the interest rate described in paragraph (ii) of subdivision (e) during the preceding calendar year, including, but not limited to, the following data, disaggregated by borough:
(A) the number of such agreements executed during the preceding calendar year;
(B) the number of such agreements that were in effect on July 1 of the preceding calendar year;
(C) the number of applications for such agreements that were received during the preceding calendar year, and the number of such applications that were not approved;
(D) the average amount of property taxes and charges subject to such agreements;
(E) the amount collected pursuant to such agreements;
(F) the number of such agreements that are current or are delinquent;
(G) the number of such agreements that entered into default;
(H) the number of agreements that qualified for the interest rate described in paragraph (ii) of subdivision (e) of this section that were terminated during the preceding calendar year; and
(I) the number of such agreements that were renewed.
(Am. L.L. 2015/030, 4/20/2015, eff. 4/20/2015; Am. L.L. 2021/024, 2/28/2021, retro. eff. 1/1/2021; Am. L.L. 2023/036, 3/14/2023, eff. 3/14/2023)
Editor's note: For related unconsolidated provisions, see Appendix A at L.L. 2008/066.