Real Estate

What happens if you don't pay property taxes in Ontario?

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  • Sep 6th, 2015 9:29 pm
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[OP]
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Jun 13, 2010
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Ottawa, ON

What happens if you don't pay property taxes in Ontario?

Is it the same as a 15%/yr* interest rate loan, but it doesn't go in your credit report, so it doesn't affect your credit rating?

*1.25%/month penalty (Ottawa, Toronto).
+Admin fees

Toronto Star says: "the municipality can seize your property and sell it to recoup the taxes, although this is a long and seldom-used process that often takes years."http://www.thestar.com/business/persona ... _know.html

See also:
Short of cash? Stop paying your property taxes
"Hey, seniors, there’s a banker out there ready to provide you with a low interest rate loan. That loan company is the government."
http://business.financialpost.com/2013/ ... rty-taxes/
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Feb 11, 2009
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I actually looked this up a couple years back.

It was interest for a few years, after 3 years or so they work with you to help you someway. After a bit more than that it goes to collectors, and I think it was after the 10 year mark, they can seize your home.
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If the property is mortgaged, the bank will pay the property taxes (or call the mortgage) as tax liens are senior to mortgages. To protect their security interest in the property.

If the property isn't mortgaged, 15%/annum will most definitely consume the entirety of the value of a property. They will eventually move to collect on their tax lien.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote: If the property is mortgaged, the bank will pay the property taxes (or call the mortgage) as tax liens are senior to mortgages.

If the property isn't mortgaged, 15%/annum will most definitely consume the entirety of the value of a property. They will eventually move to collect on their tax lien.
Isn't that only at the point where the city threatens to seize the home? I doubt overdue taxes are paid through your mortgage unless you have it set up that way in which the bank was paying your taxes through there to begin with.

(I'm actually asking, not doubting)
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deal_with_singh wrote: Isn't that only at the point where the city threatens to seize the home? I doubt overdue taxes are paid through your mortgage unless you have it set up that way in which the bank was paying your taxes through there to begin with.
No, the bank will pay it if one has a mortgage. And add it to your mortgage balance. And probably charge you a fee for doing so. Technically one is actually in default of a mortgage if they do not pay the property taxes on-time.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote: If the property is mortgaged, the bank will pay the property taxes (or call the mortgage) as tax liens are senior to mortgages. To protect their security interest in the property.

If the property isn't mortgaged, 15%/annum will most definitely consume the entirety of the value of a property. They will eventually move to collect on their tax lien.
Mark77 wrote: No, the bank will pay it if one has a mortgage. And add it to your mortgage balance. And probably charge you a fee for doing so. Technically one is actually in default of a mortgage if they do not pay the property taxes on-time.


This has to be the most asinine gibberish I've ever seen. You have absolutely no clue WTF you're talking about on this subject, so do the forum a favour and delete your nonsensical misinformation immediately.

You don't live in Ontario - - you live in Moose Jaw and pretend to live in Calgary. You've never paid property taxes in your life - - because you've never owned any property. But here comes Chris Pitzel pretending to be the subject matter expert.

First of all, the bank DOES NOT pay outstanding property tax. People have the option of including a payment for property taxes into their regular mortgage payments - - but it's an OPTION that the homeowner can decline and just pay quarterly when the bills come due.

"If the property isn't mortgaged, 15%/annum will most definitely consume the entirety of the value of a property."

What a laughable statement. Even if the property tax was $10,000 a 15% penalty for arrears would amount to a whopping $1500/year. You really think that's going to "most definitely" wipe out the full value of a property? The "fee" is NOT 15% of the value of the property, Chris. It's 15% of the TAX ARREARS. Slight difference, wouldn't you concur?

Did you mean that 15% interest on arrears would "consume the entirety of the value" on the property if the property tax went unpaid for 100 years?

First it was "performance bonds" and now this is your latest embarrassingly incorrect commentary on real estate. Apparently you enjoy humiliating yourself as the RFD Jester prancing from on thread to another with foolishly bad misinformation.
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if in Toronto, Rob Ford is going to put up another non-sense rant on your tax owing on Youtube :lol:
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Donnie740 wrote: First of all, the bank DOES NOT pay outstanding property tax. People have the option of including a payment for property taxes into their regular mortgage payments - - but it's an OPTION that the homeowner can decline and just pay quarterly when the bills come due.
I always thought the bank would do this to protect their interests and not lose the house to a municipal tax sale, of course just adding it to the debt of the homeowner?

But to the question: FWIW, my understanding is that each jurisdiction does it differently but ultimately the municipality or local government can seize the property and sell it. However, it is usually the case that the homeowner can redeem their title by paying up taxes, even after a sale has taken place. Of course there are likely interest penalties associated with this.
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jmatheson64 wrote: I always thought the bank would do this to protect their interests and not lose the house to a municipal tax sale, of course just adding it to the debt of the homeowner?

But to the question: FWIW, my understanding is that each jurisdiction does it differently but ultimately the municipality or local government can seize the property and sell it. However, it is usually the case that the homeowner can redeem their title by paying up taxes, even after a sale has taken place. Of course there are likely interest penalties associated with this.
First paragraph... omg no.
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Donnie740, you quite simply do not know what you are talking about, and need to read the terms and conditions of any mortgage. And lay off the completely incorrect and dishonest attempts at trolling. Just because you dislike me, does not give you license to post complete and unadulterated excrement.
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jmatheson64 wrote: I always thought the bank would do this to protect their interests and not lose the house to a municipal tax sale, of course just adding it to the debt of the homeowner?
They do. Don't pay attention to anything that Donnie740 says. Keeping property taxes current, so as to protect the seniority of the mortgage on the title, is a term or condition of all mortgages in Canada. In the practical sense, if the borrower fails to pay the taxes, the bank simply writes a cheque and adds it to the balance along with a hefty service fee.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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if taxes remain unpaid for three years the municipality can auction the property off. And I buy them cheap :)
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jmatheson64 wrote: I always thought the bank would do this to protect their interests and not lose the house to a municipal tax sale, of course just adding it to the debt of the homeowner?

No, no, ABSOLUTELY no.

The banks are not in the business of being a collection agency for unpaid property taxes. They DO NOT cover unpaid tax arrears for mortgage holders. Believe me, I've sold homes that have outstanding property taxes that have been unpaid for over two years.
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Donnie740 wrote: No, no, ABSOLUTELY no.
Yes, yes, ABSOLUTELY yes.
The banks are not in the business of being a collection agency for unpaid property taxes. They DO NOT cover unpaid tax arrears for mortgage holders.
Of course they don't. They add it to the mortgage, or they call the mortgage in default. That's why your property tax statement probably even has the name of the bank you have the mortgage with on it -- so the City can notify the bank if their first-lien position is at any risk of being subordinated.
Believe me, I've sold homes that have outstanding property taxes that have been unpaid for over two years.
Sure, without a mortgage I bet.
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Mark77 wrote: Donnie740, you quite simply do not know what you are talking about, and need to read the terms and conditions of any mortgage. And lay off the completely incorrect and dishonest attempts at trolling. Just because you dislike me, does not give you license to post complete and unadulterated excrement.

I could not care less about you personally, Chris. My issue is when you insist on spreading misinformation that's completely FALSE such as this. I have no idea why you feel so compelled to lecture on a subject that you have ZERO experience or involvement with. This is just like when you were lecturing a Muslim leader on how Sharia Law works.

What do the terms and conditions of your mortgage state about property taxes, Chris? Oh that's right - - you've never had a mortgage. But here you are spouting off your baseless, uninformed opinions as fact.

That's why you get ripped so hard on these forums. Maybe you like the attention it brings? Maybe you just like getting a reaction out of people? I'm not going to sit back and let you spew nonsensical gibberish to people who are honestly looking for advice and guidance in an attempt to try and pass yourself off as some kind of expert.
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Donnie740, since you seem to be having extreme trouble with reality (nevermind getting my name right), here's a copy of the sort of language that is in every mortgage loan agreement between lenders and borrowers in Canada:

http://www.scotiabank.com/ca/common/pdf ... 151010.pdf
You will keep the property free of all legal claims except ours. If you do not, we may settle the claim and charge you what it cost, including incidental expenses which include legal expenses.
Please stop spewing complete nonsense in this thread.
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Mark77 wrote: They do. Don't pay attention to anything that Donnie740 says. Keeping property taxes current, so as to protect the seniority of the mortgage on the title, is a term or condition of all mortgages in Canada. In the practical sense, if the borrower fails to pay the taxes, the bank simply writes a cheque and adds it to the balance along with a hefty service fee.
If that's the case then how could anyone possibly have unpaid property taxes to the city spanning several years?? If the bank just pays off people's taxes, then according to the city nobody would ever owe years of taxes. I'm sure the city couldn't care less if it's the bank or home owner making the payments.
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Mark77 wrote: Donnie740, since you seem to be having extreme trouble with reality (nevermind getting my name right), here's a copy of the sort of language that is in every mortgage loan agreement between lenders and borrowers in Canada:

http://www.scotiabank.com/ca/common/pdf ... 151010.pdf
You will keep the property free of all legal claims except ours. If you do not, we may settle the claim and charge you what it cost, including incidental expenses which include legal expenses.
I don't think overdue taxes qualify as a legal claim.
Legal claim would only be if the city ever took someone to court and/or put lien against a property due to unpaid taxes.
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rob444 wrote: If that's the case then how could anyone possibly have unpaid property taxes to the city spanning several years??
No mortgage. Paid up property. No bank involved.
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rob444 wrote: I don't think overdue taxes qualify as a legal claim.
Legal claim would only be if the city ever took someone to court and/or put lien against a property due to unpaid taxes.
A lien is a legal claim. And it happens within a year typically around here. Tax liens are senior to mortgage liens.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...

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