Unpaid Property Taxes in Ontario: When Can the City Sell Your Home?

Falling behind on property taxes can feel manageable at first, because the bills keep coming and nothing dramatic seems to happen. In Ontario, though, unpaid taxes can eventually lead to a municipality selling the property. The process has set steps and timelines, and there are usually chances to stop it.

This article walks through the tax-sale timeline under the Municipal Act, 2001, who can step in to pay, and what you can do if you or a family member is behind. Procedure and costs vary by municipality, so treat this as a general guide.

When the municipality can start the process

A municipal treasurer may register a tax arrears certificate against a property in a local municipality if any part of the tax arrears is still owing on January 1 in the second year after the year the taxes became owing.

In plain terms, you do not lose the right to sort things out the moment a bill is missed. There is a period of time before the certificate can be registered. But once any part of the arrears is still unpaid on that January 1 date, the municipality can move ahead. Timing can differ for property in unorganized territory, which this article does not cover.

The one-year window after registration

After a tax arrears certificate is registered, the owner or anyone else can stop a tax sale by paying the cancellation price within one year of registration.

The cancellation price covers all tax arrears, current taxes, interest, penalties and reasonable municipal costs. Because costs and interest keep adding up, the amount owing is usually higher than the original missed bills. If the cancellation price is unpaid when the year ends, the land is offered for sale by public auction or tender.

Extension agreements

A municipality may make an extension agreement giving more time to pay the cancellation price. It may do so with the owner, the owner's spouse, a mortgagee, a tenant in occupation or another interested person.

While the agreement is in force, that time is not counted toward the tax-sale periods. Whether a municipality will offer one, and on what terms, depends on its own practices, so ask the tax office directly and get any agreement in writing.

Who can step in to help

The right to pay the cancellation price is not limited to the owner. Anyone can pay it to stop a sale. That matters for families, because a spouse, adult child or other relative may be able to protect the home.

• A spouse or other family member can ask the municipality about paying the cancellation price.
• A mortgage lender, like anyone else, can pay the cancellation price, and a mortgagee can also enter an extension agreement.
• A tenant in occupation may be able to enter an extension agreement.

If you are paying on someone else's behalf, think about how you will be repaid or protected, and consider speaking with a lawyer first.

What to do next

• Find your most recent tax bill and any notices from the municipality.
• Contact the municipal tax office and ask for the exact amount owing and whether a certificate has been registered.
• If one has been registered, ask for the date of registration so you know when the one-year period ends.
• Ask whether an extension agreement is available and what it requires.
• Check your property's title to see whether a tax arrears certificate appears on it.
• Tell your mortgage lender if you are behind, and consider whether family can help.
• Speak with a lawyer if you are unsure about deadlines or about paying on someone else's behalf.

Procedure, costs and available options vary by municipality, so confirm the details with your own municipality and a lawyer.

Frequently asked questions