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Government Property Tax Sales
Interested in Government Property Tax Sales?
All over Ontario every year there are hundreds of properties offered for sale for back taxes. Some enterprising individuals are continually in the chase for the next best deal.
What is a Government Property Tax Sale?
In Ontario, this is also known as a Municipal Tax Sale or an Ontario Tax Sale. This reverts back to the principle that all land is owned by the crown.
Although an owner may have fee simple title, the greatest of land owner rights such as your home. If you fail to pay the taxes the municipality can and will seize the property.
Many of these properties are vacant land, some may have derelict building on them. Others are long forgotten about by the original owners.
These tax foreclosure sales occur across Ontario all of the time. Many are searching for waterfront deals and some lucky individuals succeed.
The Government Property Tax Sale system offers investors and bargain hunters the opportunity to purchase land and sometimes properties that are quite often a fraction of its market value.
Ontario municipalities offer hundreds of properties every year for sale for a minimum tender amount.
This is not the same as a Power of Sale or a Foreclosure on a property.
This is enacted by the mortgage holder to recover the mortgage funds. By law, the mortgage holder must use all reasonable efforts to obtain a fair market value for the property. Funds in excess of the amount owed are returned to the owner.
The municipality does not have to obtain fair market value.
By law, the municipality offers the owner every opportunity to pay the outstanding taxes in full before the property is offered for sale for unpaid taxes. This amount is usually enough to only cover the debt or outstanding taxes owing so there are numerous bargains to be found.
The minimum tender amount is the minimum amount the governmental authority or municipality must receive. This amount will include outstanding taxes, interest, penalties and the costs to sell the property.
You are in Competition
Others are searching for the same deals as you!
The Property is being offered to the public and the minimum tender amount is in a sealed bid. You are required to put down 20% of your bid amount. The person with the highest bid will get the property, just like a typical auction.
This process is known as tax sales by Public Tender. You will need to have cash(not advised), certified cheque, money order or a bank draft for the deposit.
You need to do Some Research
Government Property Tax Sales have all mortgages eliminated other than those in favor of the crown. You need to ensure watch for restrictive covenants, easements or adverse possession.
Be very careful with land that may be environmentally contaminated! You could be held liable for the cleanup!
As such you should inspect all properties before submitting a bid. Cottage country and lakefront properties may not have had a gas station on them but inspect and determine for sure.
You need to conduct an execution search and title search against the owner of the property. This is to ensure that there are no interests in favor of the crown.
If undiscovered you may find yourself with the Crown taking possession of the lands you just purchased.
A lawyer can conduct the searches for you.
There are opportunities to obtain waterfront or even perhaps a cottage property this way. Be ready to do a lot of research and travel if necessary.
Have Fun in Your Search
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