How Ontario tax sales work

When can a municipality sell?

Once property taxes are still unpaid on January 1 of the second year after they came due (2024 taxes still owing on January 1, 2026, for example), the municipality can register a tax arrears certificate against the land. The owner, and anyone else with an interest such as a mortgage lender, then has one year to pay the full amount owing, called the cancellation price. If nobody pays within that year, the municipality can put the land up for public sale.

How are sales advertised?

The sale must be advertised once in the Ontario Gazette and once a week for four weeks in a local newspaper. Where there is no suitable newspaper, the notice is posted at the municipal office and one other prominent place instead. Bids cannot close until at least seven days after the last advertisement. The notice gives the property's roll number and legal description, the minimum tender amount, and the date, time and place where bids close. Tax Sale Watch reads each Gazette issue and lists those facts here.

What is the minimum tender amount?

It is the cancellation price: the unpaid taxes plus penalties, interest and the municipality's costs. It has nothing to do with what the land is worth. That is why a lot assessed at $80,000 can carry a minimum bid under $10,000, and also why a swamp with no road access can carry the same.

How do you bid?

1. Get the official tender form (Form 7) from the municipality or the Government of Ontario's forms site.
2. Fill in your bid. It must be at least the minimum tender amount.
3. Attach a deposit of at least 20 percent of your bid, by money order, bank draft or certified cheque made out to the municipality. Twenty percent of your bid, not of the minimum.
4. Seal it in an envelope addressed to the treasurer. The envelope must say it is a tax sale and identify the property by a short description or its municipal address. Get it to the named office before the deadline, which the rules set at 3:00 p.m. local time on closing day.

Late, unsealed or short-deposit tenders are rejected. So are tenders with conditions attached, or covering more than one property. There is no room for error and no second round.

What happens on closing day?

The tenders are opened in public shortly after the deadline. The highest valid bid wins. The treasurer mails a notice to the highest bidder, who has 14 days from the day that notice is mailed, not the day it arrives, to pay the rest of the bid, plus land transfer tax, any property taxes that have built up since the sale was first advertised, and HST where it applies. If the winner does not pay, they lose their deposit and the property is offered to the second-highest bidder. Losing bidders get their deposits back.

What do you actually get?

The municipality registers a tax deed in your name. It wipes out most claims against the property, including mortgages. A few things survive: easements and restrictive covenants that run with the land, any interests of the federal or provincial Crown, and any title a neighbour has already gained through adverse possession. Where the mining rights are taxed separately under the Mining Act, which is common in northern Ontario, only the surface rights pass to you.

What can go wrong?

• You are buying blind. You have no right to go inside or onto the property. The municipality makes no promises about the title, the buildings, the boundaries or contamination.
• Someone may live there. The municipality does not have to give you vacant possession. Removing an occupant is your problem and your cost.
• The sale may vanish. The owner's legal right to stop the sale by paying ends with the one-year period, but the treasurer can cancel a sale at any point before the tax deed is registered, and usually does when the owner or a lender pays in full. That can happen in closing week, or even after the tenders are opened. Tenders and deposits are returned. Check with the tax office in closing week.
• The land may be close to worthless. Landlocked lots, road allowances, slivers and wetlands are common. Look the parcel up on a map and in the municipality's zoning before you bid.
• Assessed value is not market value. It is the assessment office's figure, and for 2026 it is still based on what the property was worth on January 1, 2016.
• Rules for non-Canadians. The federal ban on non-Canadians buying residential property, which is scheduled to end on January 1, 2027, and Ontario's 25 percent Non-Resident Speculation Tax can both apply when the land has a home on it.

A sensible way to start

1. Pick an area you can drive to. See the property from the road.
2. Ask the municipality for the tender package. Many post it on their website.
3. Pay a lawyer for a title search on any property you are serious about. It costs far less than a mistake.
4. Decide your top price before closing day and do not chase.

Sources

• Municipal Act, 2001, Part XI: Sale of Land for Tax Arrears
• O. Reg. 181/03: Municipal Tax Sales Rules
• The Ontario Gazette