Frequently Asked Questions
WHAT ARE TAX SALES?
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 the opportunity to purchase these properties. This is how you get real bargains. Property can be bought for as low as 10¢ or 20¢ on the dollar. But these properties can only be purchased by informed buyers.
Here, informed buyers 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. In some cases, they recover even less, as it is dependent on the number of interested bidders.
At the end of the day, the only thing that the property taxing authorities care about is putting the property into the hands of people who will pay the annual tax assessments. Tax sale property proceeds are returned to the original owner after taxes due and costs are deducted (unlike drug seizure property where all proceeds are retained for drug enforcement funding). Since any profits from these sales must be returned to the defaulting party, there is not much motivation for the municipality to make profits on the sale.
WHY DON’T OWNERS PAY THE TAXES DUE?
There are many reasons why properties are sold for non-payment of taxes. Some of the most common ones are financial difficulties, 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 AN INFORMED BUYER?
Information makes all of the difference! By becoming a member of the Canada Tax Sales website, you will have access to:
1. Listings of Tax Sale Properties being sold for delinquent taxes and/or debts.
2. Sheriff sales (property seized by local authorities)
3. Bank foreclosure sales.
4. Municipal sales.
The Canada Tax Sales Website includes listings for Municipal Sales across Canada and is updated as listings become available (usually twice a month). Our Tax Sale advertisements are gathered directly from Municipal and Financial sources and are always current.
WHAT TYPES OF PROPERTIES ARE SOLD?
Tax sale properties can be found in every province. 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 YOU BUY TAX SALE PROPERTIES?
First you have to know where and when the sales will take place, then …
There are two ways in which tax authorities sell properties: either by public auction or public tender, with sealed/closed bids.
This format is similar to other auction formats. An auctioneer accepts bids from several bidders and then recognizes the highest bidder as the winner. The place, date, and time of the auction will be clearly defined by the municipality and can be found in the auction advertisement on our website.
YOU DO HAVE TO BE PRESENT TO BID IN THIS TYPE OF AUCTION!
If you are the highest bidder, you will be required to pay the amount bid and any applicable land transfer tax to the auctioneer by money order, bank draft or certified check.
If you wish to submit a tender, you can ordinarily obtain a tender form from 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.
At the end of the last day posted for receiving tenders, the envelopes, which were stamped with the appropriate receipt date and time, are opened by the treasurer at a public location in the presence of at least one person who did not submit a tender. All tenders that do not meet the minimum tender amount, do not have the required deposit or are otherwise invalid, are discarded.
The two highest tenders are retained and the person who submitted the highest will usually have fourteen calendar days to pay the balance of the amount tendered. If applicable, the second highest bidder will be contacted.
* Please note that the processes described in this advertisement are intended to give an approximation of what you can expect at a tax sale auction or tender. If there is a property you wish to bid on, our website will contain complete contact information in order for you to follow-up on the listing.
Our desire is to provide a service that saves our members time. We provide these tax sale lists to our subscribers and organize the information so that it is easy to search through and in one place. We believe that, in the right hands, this information can be very useful to investors wanting to purchase real-estate through nontraditional means. We have found that purchasing real-estate at auction can save a buyer a lot of money.
However, we also realize that this information is not for the average person. There is a lot of work that goes into performing good due-diligence on a property to insure there are no additional liens on a property. Additionally, the auction lists generally contain information that is difficult for the inexperienced reader to understand. Most properties are listed by their legal description and require subscribers to contact the taxing authority to obtain the physical address. Most cities and towns have a GIS or Geographical information System that will convert this information and allow you to see the tax assessed values, recent sales, retail value, and ownership history. Otherwise this information must be looked up manually or through the tax assessor’s office computers.
For this reason, our refund policy is very liberal. We have no desire to take money from people that do not have a use for our service. We purpose to provide information that our subscribers will use and benefit from.
Here is our refund policy:
· Full refund of the Membership fee within 24 hours of signing up.
· Full refund of the monthly subscription fee if cancellation is done within 2 days of last billing.
You are able to cancel your subscription at any time and there is no minimum commitment. Additionally, prior members are able to re-subscribe at any time.