How Ontario Tax Sales Work: A Buyer's Guide

Why a municipality sells a property

When property taxes go unpaid for long enough, an Ontario municipality can recover the arrears by selling the land under Part XI of the Municipal Act, 2001 (or the City of Toronto Act, 2006 for Toronto). The municipality registers a tax arrears certificate on title, and if the arrears are not paid within the redemption period, the property is offered for sale.

The minimum price — called the minimum tender amount or cancellation price — usually covers the unpaid taxes, penalties, interest and the municipality's costs. It is often far below market value, which is why tax sales attract investors.

How the sealed tender process works

Most Ontario tax sales are run by sealed public tender. Each bidder submits one offer in a sealed envelope by the stated deadline, using the prescribed tender form (Form 7). The envelopes are opened publicly shortly after the deadline, and the highest valid tender at or above the minimum wins.

Each tender must include a deposit of at least 20% of the amount offered, paid by certified cheque, bank draft or money order payable to the municipality. Tenders without the correct deposit, or on the wrong form, are rejected.

Before the sale: the owner can still pay

Up until the sale, the owner or anyone with an interest in the land can pay the cancellation price and the sale is cancelled. That is why some listings disappear before the deadline. Always confirm the sale is still proceeding before buying a bank draft.

After you win

The successful bidder is typically required to pay the balance of the tender, plus land transfer tax and any applicable HST, within a short window (commonly 14 days). Unsuccessful bidders get their deposits back.

Properties are sold as is. The municipality makes no promises about the building's condition, access, occupants or other claims on title — some government liens and easements can survive the sale. Due diligence before you bid is essential.

Your due diligence checklist

Search title at the land registry using the PIN, check for executions (writs), verify zoning and permitted uses with the municipality, look at the property in person from public land, review flood and environmental mapping, and budget for closing costs. Members can order a Title Search, Compliance Check or Complete Due Diligence Pack directly from any Ontario listing — these research packages apply to Ontario properties only.