How to buy a tax sale property
Understand the process, the costs, and the legal risks of buying property in Ontario, whether or not you become a member.
- The basics
- By public tender
- By public auction
- FAQs
- Key terms
- Resources
Start here
A few things to know before you look at a single listing.
No membership required
You can buy any property sold for taxes by a municipality without a paid account. Membership just gives you more listings, photos, and free InfoPaks.
Equip yourself first
Read these guides and the FAQs. Tax sales are sold strictly as is, with no conditions, so the work happens before you bid.
Stay updated
We post every Ontario tax sale. Members get a weekly newsletter and access to 5,000+ past results to gauge the market.
Buying by public tender
About 99% of Ontario tax sales work this way: a sealed, written bid.
1
Find a sale
Check your weekly member email or browse the Tax Sale Properties map for upcoming sales.
2
Do your research
Download the InfoPak, then check the property details, road access, and whether there are buildings or water frontage.
3
Order a title search
Most mortgages and liens are wiped out, but Crown interests survive. A Title Search Summary tells you what remains.
4
Fill out Form 7
Enter your name, address, and tender amount, typed or legibly in ink. Conditions are not allowed.
5
Include a 20% deposit
By certified cheque, bank draft, or money order. A deposit even a penny short must be rejected.
6
Submit before the deadline
In a sealed, labelled envelope to the Treasurer. The highest valid tender wins; ties go to whoever was received first.
If you win, you have 14 days to pay the balance plus Land Transfer Tax, HST, and accumulated taxes. Miss the deadline and your deposit is forfeited.
Buying by public auction
Less common, and the rules differ: bidding is live and out loud.
1
Research and prepare
Do the same due diligence and order your title search. Bring certified funds; credit-union cheques may be refused.
2
Attend in person
The auctioneer opens by reading the tax sale rules, then bidding is out loud. You must be there to bid.
3
Win and pay immediately
The highest bidder pays the full amount on the spot, plus Land Transfer Tax, HST, and accumulated taxes.
This flow chart provides an overview of the steps involved in buying a property at a public tax sale auction.
Frequently asked questions
Deleted Interests: When the tax deed is registered, mortgages and liens are deleted from title. This includes all mortgages held by BMO, Royal Bank, CIBC, TD, Scotia Bank, Credit Union, etc., and liens such as Construction, Mechanics, Law Society of Upper Canada, and Legal Aid Ontario.
The Reason: Under Section 379(7) of the Municipal Act, 2001 (Effect of Conveyance), the transfer is “free from all estates and interests.” Banks and private lien holders are not listed as exceptions.
Crown Exceptions: Mortgages or Liens held by the Government of Ontario or Canada (or their agencies/crown corporations) remain on title. The Crown may seize the property to recover debt unless you pay it.
Other Interests: Properties may also be subject to easements, restrictive covenants, and adverse possession.
13% HST must be paid on a tax sale property unless either:
- The property has a residential building/unit/complex on it and this is not the first time that the property and residence has been sold, Or,
- The person buying the property is a HST registrant and you provide the municipality with the required paperwork indicating that you will “self-assess” and remit the required HST.
Unfortunately, you do not have the right to enter onto a tax sale property and have a look around. Nor can the municipality give you permission to do so.
That’s because the municipality doesn’t own the property. The property is still owned by the person or company that is in tax arrears. The ownership does not change until after the tax sale.
You can stand on the road or the sidewalk and look at the property. If it is a waterfront property you can take a boat out and see the property from the water. But you don’t have the right to walk onto the property. If you knock on the door and ask if you can have a look around, you’ll probably get a most unfriendly response.
If there’s a house on the property the municipality usually does not have information on how many bedrooms there are, if the basement is finished, etc.
At a tax sale, there’s less information available than there is at a normal sale of land. However, tax sale properties are usually available for prices well below market value. Some people are willing to buy a property, even though there is less information available than they would like, because of the low price.
If your tender is rejected, your cheque or bank draft will be mailed back to you a day or two after the day of the tender opening, along with an explanation of why the tender was not accepted.
As soon as a tax deed is registered it is impossible to cancel the tax sale. When your tax deed is registered the property becomes yours and neither the municipality nor the former owner can change that.
Key terms
- Crown interest
- An interest in favour of Canada or Ontario (for example, a CRA execution). It survives a tax sale and becomes your responsibility.
- Minimum tender
- The least the municipality will accept: outstanding taxes, penalty, interest, and costs. Bids below it are rejected.
- Execution search
- A search of the sheriff’s office for judgments against the owner. Crown executions can affect the property after the sale.
- InfoPak
- A package of forms and property information for a municipality’s sale. Free for members, $25 otherwise.
- Land Transfer Tax
- A tax paid to the municipality when land is sold, on top of your tender, before the tax deed registers.
- Redemption
- The owner’s right to pay the arrears and cancel the sale, but only before the tax deed is registered.
- Tax deed
- The document that transfers ownership to you. Once registered, the property is yours and cannot be reclaimed.
- Assessed value
- The value assigned by MPAC. A useful reference, but not market value or a guarantee of condition.
Resources
Official legislation, flow charts, and further reading.
- Municipal Act, 2001 · Part XI
- The legislation governing tax sales.
- LINK
- O. Reg. 181/03 · Tax Sales Rules
- The detailed rules for tenders and auctions.
- LINK
- Public tender flow chart
- Step-by-step diagram of the tender process.
- LINK
- Public auction flow chart
- Step-by-step diagram of the auction process.
- LINK
- Non-Canadian purchase ban
- In effect to 2027; check before you bid.
- LINK
- One Penny Paradise
- He got out his calculator and discovered that his rival’s deposit was a fraction of a cent less than the required 20%.
- LINK
- One Foot of Interest
- One foot purchased by tax sale for $5000 is now being sold. See how much it is being sold for.
- LINK
- Community Betrayed
- A sad story for the Croatian Credit Union resulting in 31 tax sales.
- LINK
- Cunningham vs. Front of Yonge
- LINK
Ready to find a property?
Browse current sales, or order a title search before you bid.