Arrears
Unpaid property taxes that are past due. Properties typically go to tax sale after 2-3 years of arrears, depending on the province.
Assessment Value
The value assigned to a property by the provincial assessment authority for tax purposes. This is often different from market value. In Ontario, MPAC provides assessments; in Nova Scotia, it's PVSC.
As-Is Condition
Properties at tax sales are sold in their current condition with no warranties or guarantees. The buyer assumes all risks related to property condition.
Cancellation Price
The total amount of unpaid taxes, interest, penalties, and costs that must be paid to stop a tax sale. Also called the "redemption amount."
Certificate of Tax Arrears
A legal document registered against a property indicating that taxes are in arrears. This is an early step in the tax sale process in Ontario.
Crown Land
Land owned by the federal or provincial government. Crown land cannot be sold at tax sales. Some properties may have Crown land restrictions.
Deposit
A portion of the bid amount required upfront. In Ontario tenders, this is typically 20% of your bid. At auctions, requirements vary.
Due Diligence
The research and investigation a buyer performs before bidding on a property. Includes title searches, property inspections, zoning verification, and environmental checks.
Easement
A legal right to use another person's land for a specific purpose (e.g., utility access, shared driveway). Easements typically survive tax sales.
Encumbrance
Any claim, lien, or restriction on a property. Some encumbrances are cleared by tax sale; others survive. A title search reveals existing encumbrances.
Environmental Lien
WarningA claim against property due to environmental contamination or cleanup costs. Environmental liens often survive tax sales, making the new owner responsible.
Land Titles System
The government-guaranteed system of property registration used in most of Canada. The Land Titles office maintains records of property ownership and encumbrances.
Legal Description
The official description of a property that uniquely identifies it. Includes lot and plan numbers, or metes and bounds description. Found on the property title.
Lien
A legal claim against a property, typically for unpaid debts. Tax liens have priority over most other liens. Some liens survive tax sales.
Minimum Bid
The lowest acceptable bid at a tax sale. Usually equals the cancellation price (arrears + costs). Bids below this amount are rejected. Also called "upset price" or "reserve."
MPAC
OntarioMunicipal Property Assessment Corporation. The organization responsible for assessing property values in Ontario for taxation purposes. MPAC assessments determine property taxes.
Municipality
The local government (city, town, township, county) that collects property taxes and conducts tax sales when taxes go unpaid.
Public Auction
A tax sale format where bidders compete openly in real-time. An auctioneer calls for increasing bids until no one bids higher. Common in Alberta, Nova Scotia, and most provinces.
Public Tender
A tax sale format using sealed bids submitted by a deadline. Bids are opened at a set time, and the highest bidder wins. The primary method used in Ontario.
PVSC
Nova ScotiaProperty Valuation Services Corporation. The organization that assesses property values in Nova Scotia for taxation purposes, similar to MPAC in Ontario.
Redemption Period
ImportantThe time after a tax sale during which the original owner can reclaim their property by paying all outstanding amounts plus interest. This is one of the most important factors in tax sale investing.
Redemption periods by province:
Reserve Price
The minimum price a property can sell for at auction. If no bids meet the reserve, the property may not sell. Same as "minimum bid" or "upset price."
Right of Redemption
The legal right of the former owner to reclaim their property during the redemption period by paying all amounts owed. Exercising this right voids the tax sale.
Sealed Bid
A bid submitted in a sealed envelope (or electronically secured) that is not opened until the deadline. Used in public tender sales. Bidders don't know competitors' bids.
Surplus
The amount by which the winning bid exceeds the cancellation price. The surplus may be returned to the former owner or other lien holders, depending on provincial rules.
Tax Arrears Certificate
A document registered against title indicating property taxes are in arrears. This is an early step before a property goes to tax sale.
Tax Deed
The deed given to the tax sale purchaser after the redemption period expires (if not redeemed). This transfers ownership of the property.
Tax Lien
A legal claim against a property for unpaid taxes. Tax liens have priority over most other liens and encumbrances.
Tax Sale
The process by which a municipality sells a property to recover unpaid property taxes. Can be conducted as a public tender or public auction depending on province.
Tender Package
The documents provided by a municipality for a public tender, including property details, terms of sale, bid forms, and legal requirements.
Title Search
An examination of public records to determine the legal ownership of a property and identify any liens, encumbrances, or restrictions. Essential due diligence before bidding.
Upset Price
The minimum bid required at a tax sale. Usually equals the total amount of tax arrears plus all costs and fees. Same as "minimum bid" or "reserve price."
Utility Lien
May SurviveA claim against property for unpaid utility bills (water, electricity, gas). Some utility liens survive tax sales, making the new owner responsible.
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