Whether you’re buying or selling, you should be familiar with the property tax process. That includes a Tax Sale, when a municipality sells property on which taxes are delinquent.
A new wave of targeted taxes introduced by the B.C. government in 2017 to curb speculative price inflation has failed to fend off the real culprits: vacant homes, foreign buyers and homeowners who don’t pay taxes.
What is a Tax Sale?
A Tax Sale is an auction of delinquent property taxes that can be a lucrative investment opportunity for real estate investors. The two main types of tax sales are tax lien sales and tax deed sales.
A lien sale is when the governmental entity sells a lien on a property to collect unpaid taxes and interest. This allows the seller to generate a profit while allowing the buyer to take title to the property with minimal market risk.
Tax deed sales are similar to a tax lien sale, but with the additional option of buying out any other certificate holders’ interests at the same time. This is often done to avoid lawsuits, as there can be some legal issues that may invalidate the sale of a property.
In a tax deed sale, the minimum bid is generally the amount of back taxes owed plus any other required fees and costs associated with the sale. Often, the highest bidder takes title to the property, but some states conduct bid-down auctions wherein the lowest bidder is awarded the property.
Most counties also require a post-closing redemption period for tax deed sales. During this time, the original owner can redeem the property by paying the amount of the bid, interest/penalty and costs. If the purchaser makes improvements on the property and the original owner redeems the property within the redemption period, then those improvements will be forfeited by the purchaser.
If a property is listed for sale, notice is sent to the current owner and all lienholders. This notice is published in one or more local newspapers, and includes the date, time and location of the sale.
The County also publishes a list of the properties in the newspaper once every four weeks. This list is accompanied by a legal advertisement explaining the details of the sale, including the date and time of the auction.
During this process, additional levy costs and fees are added to the delinquent account for title research, advertising, and other necessary actions. Only certified funds are accepted.
In California, if the taxes and interest are paid prior to the tax sale, the property is removed from the auction list, benefiting the assessed owner. However, a legally required notice is still sent to the owner, and the property will continue to be included on the list of delinquent properties until the owner is paid in full.
How do I prepare for a Tax Sale?
Property Tax Sales West Vancouver are held each year and can be a good opportunity for real estate investors to purchase property at a discounted price. These properties are typically owned by people who are no longer living in them, or have no use for the property.
A property tax sale can be a great way to get your hands on a piece of real estate at a fraction of its market value, but you need to do some work ahead of time. First, you need to find out if there are any encumbrances against the property. This is where a title search report comes in handy.
It can also help you determine whether the property has any zoning restrictions or bylaws, which may affect how you use it. Some municipal websites have a “Find Your Zoning” page, which will help you do this.
One of the most important things to know about a property tax sale is that it is usually conducted as a public auction, which means that you can only purchase the property if you place a bid. This is a competitive process, so you should decide how much you are willing to pay for the property before you bid on it.
If you are unable to come up with the money before the auction, you can apply to have the tax sale canceled. However, this is a lengthy and difficult process.
Another option is to file a dispute with the province’s assessment office. This can be done online or in person. If you choose to file a dispute, you must provide evidence that your property is not as assessed as it appears on the assessment notice.
Finally, if you are not satisfied with the outcome of your dispute, you can appeal to a panel. This can be done in person or by mail, and it can take up to 30 minutes.
For instance, Mike Bazilli and his wife were recently surprised to discover that they had been wrongly assessed $69,000 in speculation and vacancy taxes and a lien placed against their home by the provincial government without their knowledge. Thankfully, the couple was able to track down the assessors and have most of their tax bill corrected. But some of the liens remain on their house, and Bazilli says they are having a tough time getting the issue resolved.
How do I bid on a Tax Sale?
Tax Sales are a key part of the City’s budget process. They help fund public services such as police, fire and rescue, parks, libraries, community centres, festivals and cultural programs. They also pay for local and provincial infrastructure such as roads and schools.
During a Property Tax Sale, you can bid on any one or multiple properties. Generally, the starting bid is the upset price (the lowest possible price that a property can be sold for).
To qualify for a Tax Sale, you must be an owner of real property in West Vancouver. You must have a valid title to the property and be able to prove it. You must be willing to pay the upset price plus any applicable fees prescribed under the Land Title Act.
Bidding on a Tax Sale is a competitive process and the highest bidder wins. A successful bidder must provide the City with personal information upon becoming the successful bidder for the property.
The upset price is the total of all unpaid taxes for each of the current year, the prior year in arrears and two years of delinquent taxes plus any applicable penalties and interest. An additional 5% of the taxes, penalties and interest is added to the upset price for each year that the property has not been paid.
A property tax sale is held in the council chambers at the municipal hall of each municipality in British Columbia every year, typically on the last Monday in September. The Local Government Act requires all properties with taxes in a delinquent balance be offered for sale at the tax sale.
All properties for sale at a tax sale must be advertised in the newspaper before the auction occurs. The ads must be in at least two different newspapers and the last advertisement must be at least three days before the date of the tax sale.
In addition, the law requires that notice of all property tax sales be published in accordance with section 94 of the Community Charter, which requires us to publish the time and place of the tax sale and legal description and street address of any properties being offered for sale.
How do I close on a Tax Sale?
Tax sales are a great way to make a profit by buying homes that have unpaid property taxes. However, they also have risks. For instance, you might be outbid by other buyers and the previous owner might have already paid off their delinquent taxes. In some cases, you might have to pay additional fees to get a clear title on the property you buy.
A tax sale is a legal process by which a governmental entity, typically a county, forces the sale of property that is delinquent in paying its taxes. It can be done through a tax lien or by offering the property at a public auction.
The process of a tax sale is often a long and drawn-out one, but you have several options when it comes to saving your home from a Tax Sale. In North Carolina, for example, you have a 10-day period after the property is sold to pay your taxes and void the sale.
You can do this by contacting a foreclosure lawyer, real estate lawyer or tax attorney to learn more about the process in your area. Once you’ve completed this process, you will have a clean title to your property and the rights to resell it.
In most states, a homeowner will have at least two years to redeem their property after the tax sale has been held. During this time, the original owner can repay the buyer the amount of taxes they owe along with interest and costs.
If you don’t redeem the property during this time, a tax lien or a tax deed is recorded in your name and the new owner has full ownership of the property. In most tax lien states, the new owner is required to wait for the redemption period to expire before they can clear title and resell the property.
A lienholder’s interest in a property can be at risk after a tax sale, especially if the institution holds or services a mortgage that is secured by the property. In these situations, a foreclosure action by a tax lien or deed holder could wipe out the mortgage, eliminating the financial institution’s security for the loan.
Among many other things, David A. Grantham is a contributing author to UmassExtension West Vancouver Blo. He is a renowned expert on real estate in BC.
Born in North Vancouver, Louisiana, Dr. Grantham grew up in Lower Lonsdale. He then went on to complete his business degree at the University British Columbia. As of this writing, Grantham has completed over 100 projects, including the development of a high rise building in Vancouver.
He is a husband, father, son, brother, and friend. He was a dedicated outdoorsman and enjoyed sports such as hunting, fishing, scuba diving, and snow skiing. His wife, Alison Grantham, and their two daughters survived him. He is survived by his wife Alison Martin Grantham and two daughters.