When property owners fall way behind in paying their taxes, eventually they are foreclosed upon and Putnam County takes ownership. Eventually, the properties are auctioned off in order for the county to recoup the back taxes.
When auctioned, if a buyer puts in an offer that equals the amount of back taxes owed, and is not outbid by anyone, then their bid is accepted.
The Putnam County Executive’s office is proposing to change this and begin to sell off foreclosed properties based on their full market value.
As was explained by Deputy County Executive Bruce Walker at the county legislature’s physical services committee meeting last week, a property that has $20,000 in tax arrears can be sold for that amount, even if the property could have a market value of up to $400,000. With the change, if a buyer entered a bid for $200,000 on that property, it would not be accepted.
Deputy County Executive Walker said that the county currently has 19 properties where there is a huge disparity between the amount of back taxes and the value they would have on the open market.
County Executive Mary Ellen Odell said an example of this disparity was a property in Putnam Valley that is $400,000 in tax arrears but would be valued at $2 million on the open market.
“I love this thing. This is really smart,” Legislator Oliverio said of the proposal. “We have valuable pieces of property that we should get market value for.”
Legislator Albano said it could be put out to bid to real estate agents, who would have to promise a certain amount of advertising, among other stipulations.
“You want to be with big players that do this every day,” he said.
Noting that Putnam County Director of Real Property Services George Michaud was behind the proposal, County Executive Odell said it would also help with economic development, along with another added benefit.
“I like the idea because it can help some of our local realtors,” County Executive Odell said, noting that now properties are sold through an out-of-county auction house.
There was time to work on the proposal, she said, as the county would not be selling properties from the 2008-2009 lists until October 2012.