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From time to time the municipalities in Ontario may have properties for sale under the authority of the Municipal Act using the Municipal Tax Sales process. Professional Real Estate Investors must have proper training and coaching How to acquire Ontario tax sale properties with the guidance from Canadian real estate investment experts with proven record.These are properties which have three or more years in property tax arrears for which the municipality has processed the required registration of liens, and notices. If the property owner has failed to redeem the Tax Arrears Certificate lien which has been registered on title, the properties are offered for public tender. Learn how to acquire Ontario tax sale properties with proper education and experience eye witness LIVE training

Ontario Tax Sale properties-FAQ
Ontario Tax Sale properties-FAQ

Ontario Tax Sale Properties – FAQ Frequently Asked Questions:

What is a Ontario Tax Sale property?

A municipal tax sale is when a municipality in the province of Ontario sells one or more properties, under the authority of the Municipal Act, to recover the outstanding property taxes which are three or more years in arrears. Traditionally the property owners will receive correspondence from the municipality indicating that their property is now available for the municipal tax sale process, and encourage them to clear their account by a specific date. If the taxes are not cleared the municipality will proceed with the tax sale process without further notice. Property owners will be responsible for all relative costs relating the the Ontario tax sale process, the costs of which will be added to the respective property tax account.

If there is a mortgage on the Ontario tax sale property what happens to it?

When a municipality sells a property under the municipal tax sales process, and there is an outstanding mortgage/s on the property the mortgages are eliminated. This is true except when the mortgage is in favour of the “Crown” – the “Crown” meaning the Governments of Ontario and/or Canada, or one of their respective agencies. If a property is purchased with a Crown interest the purchaser is responsible to pay whatever is owing to the Crown. If the outstanding lien is not paid the Crown could seize the property at any given time.

Can a clear title be obtained if a property is purchased through the Municipal Tax Sales process in Ontario?

Not necessarily. The onus is on the professional real estate investor to do a title search and ascertain whether a clear title can be obtained. Consideration should be given to such items as Crown interests, execution in favor of Canada Revenue Agency, easements, restrictive covenants, and adverse possession. In most cases it is recommended that a professional title searcher be engaged to ascertain if any of these conditions exist and whether a clear title can be obtained.

Can a Ontario tax sale property/house be inspected before purchasing?

Ontario Tax Sale properties-Q&A
Ontario Tax Sale properties-Q&A

The municipality cannot authorize anyone not have the right to enter on another property nor any existing premises to view or examine the property. Only the current owner has the right to give that authorization. When a property is purchased through the municipal tax sale process it “as is where is”.

What is the minimum tender amount or minimum bid amount?

The minimum tender or bid amount must be sufficient to clear outstanding municipal property taxes including but not limited to;, property taxes, penalty and interest, any costs relating to the municipal tax sales process, Land Transfer Tax, and where applicable any HST. All purchasers must also provide a certified cheque or money order to satisfy any transfer costs that may be applicable at the local land registry office.

Can the former owner redeem a Ontario tax sale property?

Upon registration of deed in the new purchaser’s name has been registered on title the former owner may not redeem the property. However, before the tax deed is registered on title the former owner may redeem the tax arrears tax certificate by paying out all property taxes, penalty and interest, and costs relating to the municipal tax sale process.

When does the highest bidder or tenderer become the owner of the Ontario tax sale property?

Once the full redemption cost (incl. all outstanding taxes, penalty & taxes, tax sales cost, Land Transfer Tax, and if applicable GST) has been satisfied a deed will be registered on title in the successful bidder or tenderer’s name, thus successful tenerer becomes the owner of the property.

How to submit a tender or quotation for Ontario tax sale property?

The municipality uses the tendering process to sell municipal tax sale properties. Tenders must be submitted on the legislated prescribed form known as Form 7. Tenders MUST include a certified cheque or bank draft equalling 20% of the tendered price. The tender advertisement will provide the deadline for submitting tenders – the date and time will be strictly enforced.

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We believe the information contained in this article to be accurate. It is presented with the understanding that we are not engaged in rendering legal, accounting, or investment advice. When professional assistance is required, utilize the services of a licensed real estate broker, lawyer, accountant, or other consultant as may be required.

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