Frequently Asked Questions
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Accumulated Taxes are any property taxes that arise between the time of the advertisement and the date the full tender amount is paid by the highest tenderer including Land Transfer Tax and accumulated taxes.
Typically this is a relatively small amount, usually about one or two months of interest on the Minimum Tender Amount. The interest rate is 1.25% interest per month.
Consider an example wherein the Minimum Tender Amount is $10,000, a property is advertised for tax sale on March 10th and the successful purchaser makes the full payment on May 2nd. The municipality will add 1.25% interest onto the tax account on the first day of every month. This interest will be added in this case on April 1st and May 1st. The Accumulated taxes will be 1.25% of $10,000 for two months totally $250.00.
It is also possible that a property tax instalment becomes due during this interim period and if so, that would also be added to the Accumulated Taxes.
A tax sale cannot be cancelled after a tax deed or notice of vesting has been registered (a deed that names the municipality as the new owner) on the title. However, the treasurer of the municipality is able to cancel a tax sale at any time prior to this title change.
A tender submission must be accompanied by a deposit. The deposit provided with the tender must be at least 20% of the tender amount. To illustrate, if you are tendering $5,000.00, your deposit must be a minimum of $1,000.00. If you have not provided a deposit of 20% or more of the tender amount, your tender will be rejected. Please also remember that your deposit must be submitted in the form of a bank draft, money order or certified check from a bank or trust corporation. A certified check from a credit union will likely be rejected.
HST/GST/PST must be paid on a tax sale property at a rate of province tender property is located unless one of the following is true: (1) There is a residential building or complex on it and the property and residence have been sold before or (2) The buyer is an HST/GST/PST registrant. This requires that you provide the municipality with the necessary documentation indicating that you will “self-asses” and then turn over the required HST/GST/PST.
2019 Tax Rates in Canada Table
| Province | Tax Rate |
|---|---|
| Alberta | 5% |
| British Columbia | 12% |
| Manitoba | 13% |
| New Brunswick | 15% |
| Newfoundland and Labrador | 15% |
| Nova Scotia | 15% |
| Ontario | 13% |
| Prince Edward Island | 15% |
| Québec | ~15% |
| Saskatchewan | 11% |
Here's an example of Land Transfer Tax calculations in Ontario
If the purchase price is $55,000 or less, land transfer tax is 0.5% of the purchase price.
EXAMPLE: Purchase price of $20,000
| 1. | Purchase Price | $20,000.00 |
|---|---|---|
| 2. | 0.5% | x 0.005 |
| 3. | Land Transfer Tax | $100.00 |
If the purchase price is greater than $55,000, land transfer tax is calculated as follows:
| 1. | 0.5% | of the first $55,000 |
|---|---|---|
| 2. | 1% | over $55,000 up to $250,000 |
| 3. | 1.5% | over $250,000 up to $400,000 |
| 4. | 2% | over $400,000 |
EXAMPLE: Purchase price of $600,000
| 1. | 0.5% of the first $55,000 | = $ 275.00 |
|---|---|---|
| 2. | 1% over $55,000 up to $250,000 | =$1,950.00 |
| 3. | 1.5% over $250,000 up to $400,000 | =$2,250.00 |
| 4. | 2% over $400,000 | =$4,000.00 |
| 5. | TOTAL LAND TRANSFER TAX | =$8,475.00 |
When the amount exceeds $2,000,000.00 and the property contains one or tow single family homes, the percentage is 2.5.
The City of Toronto has a Land Transfer Tax Rate in addition to the above calculation. The Toronto City Council approved a new Municipal Land Transfer Tax on the authority of the City of Toronto Act, 2006 that became effective on February 1, 2008. It is applied to purchases on all properties in the city of Toronto. This will be in addition to the Province’s Land Transfer Tax.
If you have placed your order for an updated search report at least the day before the tax sale, we will email you a Title Search Update Report before noon on the day of the tender opening. Usually we will also send you an updated title search report and execution search report.
You might see the language “Subject to Executions if Enforceable” remaining on the title after your tax deed has been registered.
If the execution on your title is in favor of the Crown, it will not be removed from the title until you have paid off the Crown interest. When you do engage with the Crown to have the interest paid off, you should make sure that you have a written statement from them that the execution will be removed from the title within a specific period of time after you have paid them the amount outstanding.
If you have an execution on the title that is not in favor of the Crown and you have purchased a TSH Title Search Report for the property in question, we invite you to email us a few weeks after the tax deed has been registered. We will happily contact the land registry office and request that the execution be removed from the title. While, we are not able to make promises about the results, we are more than willing to make an attempt on your behalf.
If you wish to withdraw your tender, you must make a written request and send it to the treasurer of the municipality. The request for withdrawal must be received by the municipality treasurer before the advertised tender date and time.
When you purchase a report from TSH, you will receive the report by email. Title Search Reports are typically performed and emailed to you within two business days of your request.
It is wise to have your title search report and execution search report updated on the day of the tax sale so that you will be made aware if there are any new registrations or executions affecting the land you intend to purchase that were not registered at the time of the initial search.
It is of the utmost importance to be aware of an interests registered against your prospective property. To illustrate, it is possible that the Canada Revenue Agency has registered a mortgage against the property in the time period between the initial search and the tender date that would continue to impact the property after the sale. If you unknowingly purchase the property and didn’t pay the mortgage, the holder of the mortgage could seize the property and sell it right out from under you. As another example, if an expropriation order was registered against the property it is possible that you end up purchasing less land than you had intended to.
When you order a Title Search Update Report, on the morning of the tender opening, we will determine if any mortgages, expropriations or other interests have been registered against the property since the previous title search and we will email the results to you before noon on the day of the tax sale. Please note that the Title Search Update Report must be ordered no later than the day before the tax sale. Please also note that this report is only available if you have already ordered a Title Search Report for the property.
Municipalities, mostly counties, employ an assessor to place a value on real estate in order to levy property taxes on it. Usually it happens annually and this is what we call Assessed Value.
Every tax sale, whether it is a tender or an auction, has a minimum bid/tender amount. This amount announced by municipality upon tax sale publication release.
Potential Revenue Amount = Assessed Value Amount – Minimum Bid/Tender Amount.
For example, we have a property with Minimum Bid/Tender Amount of $5,000. The latest assessment value amount is $50,000.
So Potential Revenue Amount is $50,000 - $5,000 = $45,000.
The "Inactive" status means that tax sale has been completed/cancelled. In other words, it's no longer available for bid or tender.