Acquiring Tax Sale properties in Canada
Secrets of Super Wealthy Professional Real Estate Investors part 1 of 10:
Many provinces in Canada levy property tax on Real Estate based upon the current use and value of the land and this is the major source of revenue for most municipal governments in Canada.
While property tax levels vary between municipalities in a province there is usually common property assessment or valuation criteria laid out in provincial legislation. The municipality has the right to collect property taxes owing even if they have to sell the property to recuperate the property taxes owing. These properties are never listed on MLS or Real Estate Brokers. This is another secret of super wealthy Professional Canadian Real Estate Investors and or Apprentices to acquiring Tax Sale properties in Canada.
The secret of super wealthy Canadian Professional Real Estate Investors and or Apprentices have used this secret to build huge wealth. The municipalities sell these properties for the amount of taxes owing as they are not required to sell it at market value. This is the way that Real Estate Investors can buy a property 90% under market value. The key is to learn the act, law and the process to find and finance them and than make a great fortune.
What is a Canadian Property Tax Sale?
Simply put, tax sales are public auctions where properties are sold to the highest bidder.
Throughout the year, cities, towns, villages, townships and municipalities, in each province, compile a list of properties against which taxes have been outstanding for at least two consecutive years. After this two year period, the municipal treasurer prepares a tax arrears certificate and registers it against the property in question.
This certificate gives an accurate description of the property and indicates that the land will be sold by public sale if all taxes are not paid to the municipality within one year of the registration of the certificate.
In spite of the municipality's efforts to collect these taxes, they often go unpaid and the properties are put up for auction, allowing the public and the super wealthy Canadian Professional Real Estate Investors and or Apprentices the opportunity to purchase these properties and this is how you get real bargains. The Property can be bought for 90% under market value.
Professional Canadian Real Estate Investors and or Apprentices can buy property "free and clear" at a tax defaulted deed auction. These taxing agencies sell property to the highest bidder in an effort to recover the original taxes and costs due.
Why the Canadian Property Owners don't pay their Property taxes?
There are many reasons why properties are sold for non-payment of taxes. Some of the most common ones are financial difficulties, law suits, ignorance, death of an owner (with no apparent will or heir), owner living abroad and not realizing his/her obligations, owner moved and cannot be traced, disputes of ownership with no party resorting to the courts for settlement, etc….
How to become a Professional Canadian Real Estate Investor and/or Apprentice
1. Current Listings of Tax Sale Properties being sold for delinquent taxes
2. Sheriff sales (property seized by local authorities)
3. Canadian Grants
The Property Tax Sale advertisements are gathered directly from many different sources including the websites of the city and the provincial courts.
What kind of properties get SOLD In Canadian Tax sales?
They can include vacant lands (such as bush lots and timberland), improved lands (such as farms, cottages and houses), commercial or industrial properties, and occasionally islands.
They vary from small lots to large parcels, with hundreds of acres.
How do the Professional Canadian Real Estate Investors and/or Apprentices BUY these properties at basement bargain prices?
First you have to learn the proper law, act and its implementation including the exemptions.
Proper education, training and knowledge in order to obtain where, when and how to do it is mandatory unless otherwise you want to buy a lemon….
There are two ways in which tax authorities sell properties: either by public auction or public tender, with sealed/closed bids.
Public Auction for Canadian Tax Sale Properties
This format is similar to other auction formats.
An auctioneer accepts bids from several bidders and then recognizes the highest bidder as the winner. On our website, the place, date and time will be clearly defined in the auction advertisement.
If you are the highest bidder, you will be required to pay the amount that was bid and any applicable land transfer tax to the auctioneer by money order, bank draft or certified check.
Public Tender for Canadian Tax Sale Properties
If you wish to submit a tender, you can ordinarily obtain a tender form the municipal office, which will be identified in the sale advertisement on our website.
Your submitted tender should be accompanied by a deposit, usually 20 percent (but specified by the sale advertisement) of the tender amount, in the form of a money order, bank draft or certified check.
Your tender form, along with the deposit, should be enclosed in a sealed envelope, which is labeled as "tax sale for" and a short description or municipal address of the property to indicate which property the tender is for. Then, enclose that envelope in a second envelope, addressed to the treasurer of the municipality, as indicated in the sale advertisement and on our website.
The above article provides general commentary of an educational nature. It does not constitute advice for any specific person or any specific set of circumstances. Because circumstances vary, readers should consult professional advisers in order to obtain advice that is applicable to their specific circumstances.
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