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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Penalty Box
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Aug 19, 2008
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dutchca wrote: Ok - I work in a Municipal finance department in a fairly senior role so I think I can speak to this issue at least in Ontario. Im not sure if it is different in Moose Jaw or Calgary, wherever MarkyMark is from.

I have NEVER known a bank to unilaterally pay Property taxes on behalf of a homeowner. Homeowners can (not must) CHOOSE to pay p.tax to the bank which will then make a payment to the Muni. As far as I am aware a bank cannot force a homeowner to pay p.tax through the bank although some banks present it as such.

So Mark unless you can provide concrete documented PROOF by qouting some legislation or contract please STFU about this issue.

In times when the p.tax gets very far in arrears, the muni will get the money when the house is sold. Lawyers are bound to check ptax records with a muni before completing a deal. A muni can also go the tax sale route but that is rare. If the property tax is above the value that the property brings at tax sale, the Municipality funds the difference.

Quoted for truth.
Licenced Realtor and P.Eng
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Apr 11, 2008
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Just take a look at Casa Loma. The thing cost $3.5 million to built and the city seized it for $27,303 in back taxes, and this is after the city increased the tax from $600/year to $1000/month. Don't mess with the government, especially if you are rich.
Deal Addict
Jan 19, 2011
2901 posts
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blaznazn22 wrote: so I would like a clear answer to this question free of bickering and what not. In ontario, you can stop paying property taxes and be charged at only an intererst rate of 1.5% per year? Is this true or false? How long can you keep doing this, ie not pay property taxes for? What are some of the consequences to doing this? Will this affect your tax refunds? Will it affect your credit score? Anything else you can think of to add to this list.
Notwithstanding some interesting programs for cash strapped homeowning seniors in the article linked to in the OP, here are your answers:

In ontario, you can stop paying property taxes and be charged at only an intererst rate of 1.5% per year? Is this true or false?

In Ontario, yes you can stop paying property tax for a fair time. Not at 1.5 percent a year, however. I think the rate is 1.5 % a month, unless you can avail yourself of one of the programs in the article linked

You will acrue interest at a rate that is calculated on the outstanding balance on the first day of the month (as mentioned above, I think it is 1.5% per month)


How long can you keep doing this, ie not pay property taxes for?

You can do this for at least up to roughly three years, during which your municipality will send you occasional past due notices and account balances. Approaching three years past due, they will send you more serious correspondence about further action they may take to collect tax arrears, including potentially seizing your property to collect the taxes owed


Will this affect your tax refunds?

There is no relationship between property tax and income tax, ergo no effect on personal income taxes owed to you.


Will it affect your credit score?

There is no impact on your credit score, as Municipalities do not report to Credit Agencies.

Anything else you can think of to add to this list.

Come mortgage renewal time, however, your tax account will have to be up to date. I do not know for certain the rules regarding rolling past due tax balances into a renewed mortgage, however we have done that on one occasion.


I hope that helps, and regardless of any other claims you may find here, is as close to the truth as you are going to find. I am a homeowner for over 20 years (four homes now, and counting, actually!) so have a wee bit of experience when it comes to property taxes! If you find my previous posts this thread, I have done exactly that on two occasions with two properties, so I speak from actual real experience.
"The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end; there it is."
Just a guy who dabbles in lots of stuff learning along the way. I do have opinions, and readily share them!
Deal Addict
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Apr 1, 2007
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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?? 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.
Old folks who have already paid their mortgage. You still need to pay property tax (rent) once your mortgage is paid... Another thing homeowners conveniently forget...
Deal Addict
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Jan 2, 2012
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Toronto
WontonTiger wrote: Old folks who have already paid their mortgage. You still need to pay property tax (rent) once your mortgage is paid... Another thing homeowners conveniently forget...
Yes I should have worded it... how could anyone with an active mortgage possibly have unpaid property taxes to the city spanning several years??

Answer is that in most cases the lenders don't automatically pay property taxes in arrears, and don't get involved until liens are put on the home.
Deal Guru
Dec 31, 2005
13306 posts
736 upvotes
Many years I pay my property taxes once or twice a year. For a good chunk of the year I have a balance owing....usually pay off the previous year once u get my tax return in May...

Never had the bank pay
Never had any effect other than an interest payment
Did not have any issue renewing my mortgage this week.
Penalty Box
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Aug 19, 2008
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fieldhousehandyman wrote:
I am a homeowner for over 20 years (four homes now, and counting, actually!) so have a wee bit of experience when it comes to property taxes! If you find my previous posts this thread, I have done exactly that on two occasions with two properties, so I speak from actual real experience.

Wow, imagine that - - someone speaking from actual first hand experience instead of regurgitating "anecdotal" information they read online.
Licenced Realtor and P.Eng
Newbie
Aug 12, 2014
23 posts
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Sorry for bumping this thread, i just wanted to get some answers because I was curious how the bailiff works out. I live in Toronto BTW

My neighbour is abroad and he was able to pay off Toronto Property Tax nearly $2000 of his oustanding taxes. He got a bailiff in April 2013 and arranged a payment plan with Toronto Tax.

WHile abroad, I was helping him check his mail.
He got a bailiff in April 2014 showing that has outstanding balance in 2013 calendar year of $1000 while his 2014 property tax prices are being incurred. However, in May, he got a late notice showing the unpaid 2013 of $700. He told me he paid another $300 thus his current 2013 outstanding balance is $400. However, he did not make a payment last month due to financial difficulties. The May late notices mention no bailiffs

I checked the Toronto Tax website and it says that tax arrears in previous calendar years are given a final notice in April and if not responded, they're sold to a bailiff.

I last checked my neighbours mail on June 15 and there were no bailiff notices but the website says bailiffs are given at the beginning of May. I also noticed that he mad a $300 payment in April after he got the bailiff notice which I assume was the "proper response" (since teh final notices require 21 day response).

He's asked me to check his mail again because he's coming back next week and he's paranoid about a possible bailiff letter but I assume that Toronto Tax didnt issue the outstanding 2013 balance to bailiff because I checked June 15 and there was no bailiff letter or notice. Plus he only has $400 left to pay off in his 2013 outstanding balance. Should he be worried?
Newbie
Sep 4, 2015
35 posts
8 upvotes
Scarborough, ON
Hi

I do this on daily basis, everyone that has replied seems to to be almost correct, but not fully correct.
My answers apply only to the province of Ontario, Canada.

1. Can the Gov't take your property?
Yes- but in most cases they wait 3 years before they take any legal action.

2. Can the bank take the property or pay the tax arrears?
Yes the bank can, but there is no incentive for the bank do this.
Property taxes have priority over any mortgages.

3. Please have informed answers to legal questions, not opinions.
Deal Addict
Aug 19, 2013
2397 posts
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RonAlphonso wrote: Hi

I do this on daily basis, everyone that has replied seems to to be almost correct, but not fully correct.
My answers apply only to the province of Ontario, Canada.

1. Can the Gov't take your property?
Yes- but in most cases they wait 3 years before they take any legal action.

2. Can the bank take the property or pay the tax arrears?
Yes the bank can, but there is no incentive for the bank do this.
Property taxes have priority over any mortgages.

3. Please have informed answers to legal questions, not opinions.
4. Please don't respond to threads that are over a year old. We've all moved on.
Deal Addict
May 12, 2014
2801 posts
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Montreal
RonAlphonso wrote: 2. Can the bank take the property or pay the tax arrears?
Yes the bank can, but there is no incentive for the bank do this. Property taxes have priority over any mortgages.
Not clear on what you mean here: If property taxes have priority over mortgages, then doesn't the bank in fact have a strong incentive to pay off outstanding property taxes? Same applies to anyone holding a 2nd mortgage vs the 1st mortgage. (ie it may be in the 2nd mortgage holder's interest to pay off the 1st mortgage)


Momof3cuties wrote: 4. Please don't respond to threads that are over a year old. We've all moved on.
Unless a thread is time sensitive, or unless the original thread is already very long, then I prefer that people reply to old threads to correct misinformation, or to update information. Why have multiple similar threads?

Anyways, I've often found out interesting things due to people reviving old threads.
Deal Fanatic
Jul 3, 2011
5768 posts
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Thornhill
FrancisBacon wrote: Not clear on what you mean here: If property taxes have priority over mortgages, then doesn't the bank in fact have a strong incentive to pay off outstanding property taxes? Same applies to anyone holding a 2nd mortgage vs the 1st mortgage. (ie it may be in the 2nd mortgage holder's interest to pay off the 1st mortgage)
They do indeed and any mortgagee if they know of it will remove same to protect their interest in the mortgage because they can lose all rights to the property for taxes of any sort.

In addition, their standard charge terms allows them to clear any lien on the property and bill the owner.

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