A Sale of Land by Public Tender Toronto is a process whereby a municipality can sell a parcel of land to recover property taxes. The land is sold at a very low price.
The process is governed by the Municipal Act, 2001 and Ontario Regulation 181/03. It is a highly competitive environment that allows the lowest possible bidder to purchase the property.
What is a Tax Sale?
A tax sale is the sale of real property by a government authority when a taxpayer has reached a certain point of delinquency in their owed property taxes. There are two types of tax sales: a tax lien sale and a tax deed sale.
The tax sales process is usually carried out through an auction of the land to a bidder. This can be a good option for real estate investors who wish to purchase properties at a cheap price. However, it is important to remember that purchasing a tax sale property is not without risk.
There are many risks involved when buying a property at a tax sale, including environmental issues, liens and title issues. Moreover, there are no site visits available to buyers, and the successful bidder will not receive a key to the property.
Another potential hazard is that some buyers might attempt to execute a wash sale, which is a tax-deductibility scheme that enables individuals to sell at a loss and then buy the same stock again in order to avoid paying capital gains tax. This is not allowed by the Internal Revenue Service, so any investor looking to profit from a tax sale should be aware of this and take care to consult an experienced attorney before submitting a tender.
The main reason why people tend to invest in tax sales is because they can obtain a property at a much cheaper rate than the market value. In addition, tax sales can be a great way to obtain properties that are hard to find in the real estate market. In fact, some real estate investors swear by them, so if you’re in the market for a property, you might consider a tax sale as an option.
How is a Tax Sale Organized?
Tax sales are a government-led process that can be a good option for property owners who have been delinquent in their property taxes. Financial institutions use these sales to recover unpaid taxes on a property, and if the owner fails to pay the tax debt, they can sell the property at auction to the highest bidder.
In most cases, the municipality will notify the owner of the delinquency and allow them a certain amount of time to resolve it before the sale begins. In some cases, a homeowner can prevent a tax sale from occurring by paying the delinquent taxes and fees, or by taking out a mortgage to cover those costs.
A property owner who is able to do so may redeem the property within three years of the date of the tax sale. This allows the owner to reclaim their property, as well as any interest that has accrued.
During this period, a tax sale buyer will have no rights to the property. However, if the owner does not redeem their property, the tax sale buyer can take away all of the property’s rights.
The owner can also reclaim the property at any time during this three-year period by obtaining a court order to regain ownership of the property. After a court order is granted, the owner can then reclaim the property by paying the delinquent taxes, any interest that has accrued, and any costs that have been incurred by the tax collector.
Tax sales can be a great way to find investment properties, and for home buyers to find their next home. But it’s important to be aware of all the risks and restrictions that come with these properties before purchasing.
What is the Minimum Bid Amount?
The City of Toronto is currently in the throes of collecting millions of dollars in unpaid property taxes and a sale of land by public tender is one of the last steps in that process. The City is selling 22 properties with a combined total of more than $21.1 million in overdue tax bills. Getting your hands on the fabled properties is not for the faint of heart. For example, there is no guarantee that the new owners will be up to date on their tax obligations or even have a valid address. Hence, the City is deploying the best of breed technologies to ensure a smooth and orderly sales process.
What is the Maximum Bid Amount?
A tax sale is a process whereby a property is sold to the highest bidder who agrees to pay the auction price plus accumulated taxes, penalties and interest, HST (if applicable) and land transfer tax. This type of sale is also referred to as an “upset” or “tax deed” auction.
The maximum bid amount for a tax sale depends on the type of auction and the rules for the municipality where the property is being offered. For example, a tax sale in Toronto typically requires the highest bid to be below the upset price.
To submit a tender, you must complete the form in the package and ensure that your roll number and the property description are written on the outside of the envelope. The envelope should also be sealed. Once you have completed the tender, you should enclose a certified cheque or bank draft for 20% of your bid.
If you are successful in submitting your tender, you will receive a notice of acceptance by mail. This will state that you have been declared a “successful purchaser” and that the balance of your bid, accumulated taxes, land transfer tax, and HST must be paid to the City within 14 days. If you do not make this payment, your tender will be withdrawn and the second highest bidder will be given an opportunity to purchase the property.
Bidding in a tax sale is a public event, so you should be aware that other people will be competing for the property. It is also important to be able to obtain financing in order to purchase the property. In addition, you should have a lawyer to protect your interests before submitting your tender.
How do I submit a Tender?
The sale of land by public tender (also known as a “tax sale”) is governed by the Municipal Act, 2001, and Ontario Regulation 181/03. A Tax Arrears Certificate is registered on the title of the property to indicate that the property is eligible for the tax sale.
Tenders must be submitted using Form 7, Tender to Purchase as per the Municipal Act, and must be accompanied by a deposit in the form of a certified cheque or bank draft of at least 20% of the bid amount. The tenders are then opened in public on the date and time advertised, and reviewed for legislative compliance.
Interested parties must also investigate any zoning, access, work orders, environmental concerns, water and hydro and other arrears, building restrictions, liens, title problems or any other issues affecting the property before submitting a tender. All prospective purchasers should consult with a lawyer licensed to practice in Ontario and in good standing with the Law Society of Upper Canada before submitting a tender.
A successful tenderer will receive the balance of the tendered amount plus any applicable municipal and provincial taxes, accumulated HST, and tax deed. If the tenderer is not able to complete the sale within 14 days, then they will be notified by mail that the tender has been rejected and that their deposit will be forfeited.
The City does not provide vacant possession of the properties sold under a sale of land by public tender, and provides no key to any buildings on the property. The onus is on the tenderer to conduct their own inquiries into any underlying issues, such as zoning, access, work orders, liens, environmental concerns, etc., which may survive the tax sale.
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.