In Nova Scotia, if the tax account of one or more properties has been in arrears for over two years, a tax sale may take place. This is where the property is seized and sold by a municipality in order to recover lost tax revenue. The municipality aims to hold at least two tax sales per year, advertising properties in the local paper prior to the sale.
Once a date has been established for the next tax sale, you will be able to access an up-to-date listing of tax sale properties that are up for auction. The tax sale will either be at a public auction wherein the highest bidder will win the property, or by public tender, where you will submit a written document that tells the treasurer how much you are going to pay for the property to purchase it. However, there is a minimum bid amount. This refers to the minimum amount that the municipality must receive in order to sell the property. The amount covers the total of outstanding taxes, penalty, interests, and sale costs that the municipality will have to cover.
A minimum amount does not necessarily mean you can buy the property for that low price. This is just the lowest amount that the municipality is allowed to accept for the property. Any bid that falls below the minimum amount must be rejected by the municipality. Generally, the person who submits the highest bid will be allowed to buy the property.
You should bear in mind that if you are announced a successful bidder, the title will be passed to you at the end of the redemption period, if the property has not yet been redeemed. The redemption period for Nova Scotia is 6 months.
Before you decide to purchase a tax sale property, it is important to note that the municipality does not hold the title of the estate, nor do they have access to any other information concerning the property they are selling. This means that the market value of the property you are buying could be higher or lower than the minimum bid, but it’s entirely your responsibility to examine the property and figure out whether it is a good investment. It is our strong recommendation that, before bidding, you examine the title and executions to see what will actually stay on the title and become your duty after the title is transferred. It is also important to remember that, in Nova Scotia, while you may drive past the property, you are not allowed to visit the site or go onto the property.
A few other things to note if you are announced a successful bidder:
There is no vacant possession
You will not receive a key to the property
You might be responsible for the eviction process of any tenants that may still reside on the property (if there are any).
The municipality is not obligated to evict tenants of the property. If there are still be people living in the property when you purchase it, you may need to hire a bailiff or lawyer to handle the eviction process.
You should check if there are any Federal or Provincial liens on the property’s title.
Before going for a public auction, we recommend to order a title search using www.taxsaleshub.ca – a Title Search Report (the report will be issued in 1-2 business days) provides detailed information on the property, including former owners, liens, mortgages or other encumbrances if any.
You should investigate zoning, planning or building restrictions, as well as any work orders.
If you are planning to do any work on the property, it is crucial that you first check you are allowed to. Either go to the City Hall to do your research, or see if your municipality has a "Find your zoning" page, where you can figure out zoning by the roll number.
You are responsible for any environmental concerns if there are contamination issues with the property (if there are any).
"Environmentally contaminated" properties are those built on lands that are polluted in some way, or properties that have contributed to pollution – for example, properties that are used for gas stations or industrial use.
If you choose to buy such a property, you may be liable to pay for environmental clean-up, which can be pricey. For this reason, it is not recommended to buy an environmentally contaminated property unless you have the expertise and funding to employ a clean up that satisfies all legal requirements. It is also advisable that you view properties before submitting a bid, so that you may determine (a) whether the property is environmentally contaminated, and (b) whether you are willing and able to have an environmental clean-up done.
Before submitting a bid, you might want to consult a lawyer to protect your interests.
Before going to the auction, set a limit on how much you are willing to pay for the property
As it is an auction, others will likely be bidding. By having a set amount in your mind that you are willing to pay, you will avoid getting overexcited and bidding more than you actually want to pay for the property. The amount you decide on must be higher than the minimum bid for the property.
Ensure you have enough money with you
In some municipalities, the successful bidder may have to pay the total amount for the property there and then, so be prepared for this
Arrive at the public auction venue
To buy a tax sale property, you will need to attend the public auction in person. The time and venue where the auction will be held is usually announced on the municipality’s website. There are no forms necessary for you to fill out before attending the auction.
If you win the auction
If you make the highest bid, congratulations, you’ll be announced the successful bidder! You’ll need to pay for the property immediately, or you’ll have to deposit a smaller amount that equals the taxes, interest and expenses incurred for the sale of the house. After that, the remaining balance must be paid within three working days after the tax sale, using the same or a similar payment method.
If you fail to settle the balance within the 3-day time limit, the property will be listed for a tax sale again. The costs incurred for the resale will be deducted from your deposit, and the rest of the balance will only be refunded after the resale auction is held.
Once you’ve paid the full amount for the property, the treasurer will give you a certificate of sale. This should describe the land sold and how much it was sold for. It will also state that a tax sale deed will be provided upon payment of the prescribed fee at any time after six months from the date of the sale, if the property is not redeemed.
Cancellation of sale
The treasurer of the municipality is within their rights to cancel a tax sale at any point before the title change.
Your tender must be in a sealed envelope with a description of the property or an address for the land, written clearly enough to know which property you are submitting your tender for.
Title Search Report provides information about a piece of land. It will include information about the owner, if there are any mortgages, easements or restrictive covenants or any other interests affecting it.
