Tax Sale Good or Bad Idea?

[kelownadreamer]

What is the real deal with tax sales? Is this to good to be true?(probably) Does anybody have any experience with buying properties at a tax sale (auction).

 

[JimWhitelaw]

I don`t claim to be authoritative on the topic, but I`ve never heard of properties being sold at tax sale auctions in Canada, only the US.

 

[GarthChapman]

I bought an empty lot in a developed area of Calgary at a Tax Sales auction in Calgary in about 2005. When speaking with a person at City Hall later to arrange payment and such I was told it was the first one that had actually sold in several years. It seems many land owners get to the brink of losing their property and at the last moment come up with the tax arrears and the property falls off the list of those to be sold.

We later got a development permit, had an architect draw up custom plans and then sold the package to a Builder as a project for his son to complete, made a nice return, and once in a while drive by to admire what our vision became...

 

[wealthyboomer]

Here is one happening in Kelowna, BC on September 27, 2010:
http://tinyurl.com/243m87g

 

[Pheenix]

QUOTE (GarthChapman @ Sep 18 2010, 07:24 PM) . . . It seems many land owners get to the brink of losing their property and at the last moment come up with the tax arrears and the property falls off the list of those to be sold.

I have looked at several, went so far as to get all the info on a really nice property. A short time before the auction was informed that indeed it had been pulled, because the arrears had been paid. I was just glad that my lawyer I had not yet done the searches, which are your responsibility.

I half expected this as the economy was improving, not declining, and the property was an attractive recreational piece, in a moderately high demand area, and worth far more than the arrears, by many multiples. The very least I expected it would go for more than I was wiilling to pay, but worth a shot.

A lot of the stuff I looked at over the years, by paper and on line were second or third tier stuff. Sounded nice at first but probably difficult to move and may be the reason it eventually went for taxes - couldn`t sell and wouldn`t pay taxes - too remote, difficult to get to, ultra depressed market area, etc etc., so stopped looking.

The more interesting question is whether the slow economy will increase the supply and at what stage of the cycle. There are other strategies to employ to find and secure properties in that situation. It is probably several years before the municipalites will make this type of move, so to get something attractive `at the bottom` would mean that the owner will have to be struggling for sometime and unless sick or otherwise disengaged, has attempted to sell it.

Good luck hunting.

 

[GaryMcGowan]

Tax sales on decent homes are pretty rare.
There was one last year in Newmarket ON. But one week before it went to auction the arrears was paid off.
65k tax bill.
FMV 625k
No mortgage (in tax sale all mortgages/liens get written off)
425k CRA Lien ALL CROWN Liens stay with the property.

If someone got the home through the auction they would have to pay the CRA Lien with cash. I don`t know of any Lender that would of put a mortgage on the home without the Lien being paid of first.

Typically in Ontario Tax Sales are usually for vacant land in Cottage and Hunting areas.

 

[MKBridge]

I have always thought these addresses would be great places to receive a Ron Legrand yellow letter! Some of these guys might be motivated sellers. These addresses are always listed in the newspaper the beginning of September, before the actual tax sale.
Kathi

 

[DaveL]

With a tax sale is it like the US where you pay off the taxes and you are the new owner of this home?

 

[GarthChapman]

I my Calgary case, it was an auction. It went to the highest bidder - and happily that was us! I think this is normally the case, and perhaps so due to redemption rights of property owners in Canada generally.