A tax sale is the process followed by a municipality to recover unpaid property taxes through the sale of the property in arrears. Properties become eligible for the initiation of tax sale proceedings once they become three years in arrears.
Windsor’s municipal landholdings grew by six properties after city council approved seizing them after many years in tax arrears on March 11th,2014. Legislation regarding the tax sale process is found in the Municipal Act, 2001 including Ontario Regulation 181/03.
A Tax Arrears Certificate indicates that the property will be sold if the “Cancellation Price” is not paid within one year of the registration of the certificate. Once a certificate has been registered, partial payments cannot be accepted.
The Town shall advertise the property for sale for non-payment of taxes if the “Cancellation Price” is not paid within one year of registration of the certificate.
Just advertising them for sale, however, tends to generate sufficient interest by most owners to pay the back taxes and penalties that are owed. Last year, for example, 22 properties collectively owing $710,000 in tax arrears were advertised for sale but only four were eventually sold off in the city of Windsor.
Should a tax sale not result in a successful purchase, the city has two years to decide whether to take it over or return it to the registered owner, albeit with a write-off of any accumulated tax arrears. That’s why A property can be in tax arrears up to 10 years before the city steps in to take it over. There are currently 132 properties with tax arrears liens registered by the city of Windsor won’t move in until there’s four consecutive years of unpaid taxes. Even then, the owner still has the opportunity to sign on to a five-year extension plan for repayment.
Any number of reasons for no takers of a property put up for sale for unpaid taxes, including a lot that is too small to be developed; a property that is in poor condition; or a minimum sale price (based on taxes owed) that exceeds the property’s market value.
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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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