Preconsidered Res. No. 533
Resolution to establish that the interest rate be two and one half percent per annum for Fiscal Year 2027 for certain properties for which the owner has entered into an installment payment agreement with the department of finance for payment of delinquent property taxes, assessments, or other charges
By Council Member Lee
Whereas, Pursuant to Section 11-224.1 of the Administrative Code of the City of New York the Banking Commission is required to recommend to the City Council, not later than the 13th day of May of each year, the proposed interest rate to be charged for certain properties for which the owner has entered into an installment payment agreement with the department of finance for payment of delinquent property taxes, assessments, or other charges; and
Whereas, The Banking Commission is required to propose a rate at least equal to the most recent federal short-term interest rate as determined by the United States Secretary of the Treasury in accordance with U.S. Internal Revenue Code § 1247(d), rounded to the nearest half percent (the “Applicable Federal Rate”); and
Whereas, The Banking Commission notes that as of May 2026, the Applicable Federal Rate stands at 3.82 percent; and
Whereas, It is in the best interest of the City to encourage otherwise delinquent taxpayers to enter into arrangements to begin the prompt payment of taxes on real estate by all taxpayers; and
Whereas, The Banking Commission forwarded its recommendation to the Council, by letter dated May 7, 2026, that the interest rate to be charged for certain properties for which the owner has entered into an installment payment agreement with the department of finance for payment of delinquent property taxes, assessments, or other charges be 5 percent per annum for Fiscal Year 2027; and
Whereas, The Applicable Federal Rate has declined slightly from 4.05 percent to 3.82 percent since May 2025; and
Whereas, The Wall Street Journal Economic Forecasting Survey for April 2026 anticipates interest rates to see minimal change over the upcoming year, including the 10-Year Treasury Notes slightly declining from 4.28 percent on June 30, 2026, to 4.18 percent on June 30, 2027; and
Whereas, The interest rate has been at 2.5 percent per annum for certain properties for which the owner has entered into an installment payment agreement with the department of finance for payment of delinquent property taxes, assessments, or other charges since Fiscal 2025; and
Whereas, The number of delinquent properties has been declining since Fiscal Year 2023 indicating the current interest rates are sufficient to encourage compliance; now, therefore, be it
Resolved, That the Council of the City of New York establishes that the interest rate be 2.5 percent per annum for Fiscal Year 2027 for certain properties for which the owner has entered into an installment payment agreement with the department of finance for payment of delinquent property taxes, assessments, or other charges.