Quick Answer
Ontario tax sales (sale of land for tax arrears) use a sealed-bid public tender process. After 2+ years of unpaid property taxes, the municipality registers a Tax Arrears Certificate. Buyers submit sealed bids by a deadline; the highest bid wins. The original owner has a 1-year redemption period to pay all arrears and reclaim the property. A 20% certified cheque deposit is required with your Form 7 tender. Minimum bid equals the "cancellation price" — all outstanding taxes, penalties, and costs.
Overview
Ontario uses a sealed tender (public tender) process for tax sales. Properties are advertised, and interested buyers submit sealed bids by a deadline. The highest bid wins, but there's a one-year redemption period during which the original owner can reclaim the property.
Ontario Key Facts
Redemption Period
1 Year
Sale Type
Sealed Tender
Deposit Required
20% of Bid
Balance Due
14 Days
How Ontario Tax Sales Work
Tax Arrears Certificate
After 2+ years of unpaid taxes, the municipality registers a Tax Arrears Certificate.
Notice Period (1 Year)
Owner has 1 year to pay arrears before property can be advertised.
Property Advertised
Municipality advertises the property for tender for 4+ weeks.
Submit Sealed Bid + Deposit
Submit sealed bids with 20% deposit by the deadline.
Winning Bid Announced
Winner pays remaining 80% within 14 days. Tax Deed registered.
Payment & Costs (Ontario)
Minimum Bid
Cancellation Price (taxes + costs)
Initial Deposit
20% of your bid amount
Balance Due
Within 14 days of winning
Payment Method
Certified cheque / bank draft
Note: If owner redeems during the 1-year period, you receive your payment back plus 10% annual interest.
Investing in Ontario Tax Sales: Strategy Guide
Ontario is Canada's most active tax sale market. With over 400 municipalities conducting independent sealed tenders, properties come up year-round rather than in a single annual event. The sealed tender process creates an information asymmetry advantage for well-prepared investors — you're bidding blind, but disciplined research gives you an edge.
Ontario Investor Playbook
- ?Target rural Ontario first. Rural municipalities (Haliburton, Renfrew, Frontenac) frequently produce $10,000–$80,000 properties with cancellation prices far below market value. Competition is lower and deposit requirements are smaller.
- ?Monitor the Ontario Gazette weekly. All Ontario tax sale advertisements must appear in the Ontario Gazette. Set up a weekly search at ontariogazette.ca for 'tax sale' or 'sale of land for tax arrears'.
- ?1-year redemption: price it in. During the redemption year, the owner can reclaim at any time. If redeemed, you receive your funds back plus 10% annual interest — it becomes a secured loan at 10%. Factor this scenario positively into your expected return.
- ?Use odd-ending bid amounts. Many bidders submit round numbers. Bidding $127,250 instead of $127,000 can be the difference between winning and losing.
Key Ontario Legislation: Municipal Act, 2001, S.O. 2001 c. 25, Part XI; Ontario Regulation 181/03 (Sale of Land for Tax Arrears)
Due Diligence: What to Research Before Bidding
Tax sale properties are sold 'as-is, where-is' with no representations or warranties. The seller (municipality) makes no guarantees about the property's condition, title clarity, or habitability. Thorough due diligence before bidding is the only way to manage risk.
1. Title Search
Hire a real estate lawyer or title search company to pull a full title search before bidding. Identify all encumbrances, easements, rights-of-way, and registered charges. Understand which liens survive the tax sale and which are cleared.
2. Crown Interest Search
Check for outstanding CRA (Canada Revenue Agency) liens, environmental compliance orders, and Crown easements. These interests often survive a tax sale and become the new owner's responsibility.
3. External Property Inspection
Visit the property in person. Look for signs of structural damage, roof condition, foundation issues, utility connections, fire damage, vandalism, or occupation. Check if the property matches its legal description and lot size.
4. Zoning & Permitted Use
Contact the municipality's planning department to confirm current zoning, any outstanding by-law violations, work orders, property standards orders, or demolition orders. These issues transfer to the new owner.
5. Environmental Risk
For commercial, industrial, or rural agricultural properties, request a Phase I Environmental Site Assessment (ESA). Environmental contamination does not clear with a tax deed — the new owner becomes responsible for clean-up.
6. Occupancy Status
Determine if the property is occupied. Occupied properties require following the full tenancy eviction process under provincial legislation before you can take vacant possession — adding months of time and legal costs.
Estimated Due Diligence Costs
Title Search
$300–$800
Lawyer Review
$500–$2,000
Phase I ESA
$2,000–$5,000
Full Cost Breakdown: What You Actually Pay
Example: $150,000 winning bid on a residential property
Always add 10–15% contingency for unexpected repairs, extended redemption periods, or legal complications. HST/GST may also apply depending on property type — see our HST on Tax Sales guide for details.
Ontario Tax Sale: Frequently Asked Questions
Do I need a lawyer to buy a tax sale property?
You are not legally required to hire a lawyer to bid at a tax sale. However, it is strongly recommended. Tax sale transactions involve significant legal complexity — title searches, encumbrance review, tax deed registration, and potential redemption complications all benefit from professional legal guidance. The cost of a lawyer ($1,500–$3,500) is small relative to the risks of proceeding without one.
Can I inspect the property before buying?
You can inspect the property externally — walking the perimeter, observing condition, checking the neighbourhood — but you cannot enter the building before purchase (you don't have permission from the current owner). Some municipalities will facilitate voluntary walk-throughs if the property is vacant and accessible, but this is not guaranteed. This is one of the key risks of tax sale investing.
What liens are cleared by a tax sale vs. what survives?
Generally cleared: private mortgages, bank liens, construction liens (mechanics' liens), judgment liens, utilities arrears, and most registered charges. Generally survives: CRA liens (federal tax debts), provincial Crown charges, environmental compliance orders, certain municipal by-law charges, and easements/rights-of-way. The exact list varies by province — always conduct a full title search and discuss surviving interests with your lawyer before bidding.
Can I get title insurance on a tax sale property?
Owner's title insurance is available and advisable for tax sale properties. Standard lender's title insurance (for mortgages) is harder to obtain at the time of purchase, as insurers may exclude losses from known tax sale encumbrances. After you take possession and have the property inspected, owner's title insurance protects you from title defects discovered after purchase.
How do I find upcoming tax sales in Ontario?
TaxSalesPortal.ca aggregates active tax sale listings across all of Ontario in one place. You can also monitor the provincial gazette, subscribe to individual municipality newsletters, and check local newspapers where tax sales must be legally advertised. Creating a free account on TaxSalesPortal.ca lets you set up custom alerts for new listings as soon as they're posted.
Related Guides
Due Diligence Checklist
Complete pre-bid research guide
Important Risks to Know
Critical risks every buyer must understand
Redemption Periods by Province
Compare all 10 provinces side-by-side
Crown Interest in Tax Sales
What CRA liens and Crown liens survive
How to Fill Out Form 7
Ontario tender form field-by-field
HST on Tax Sale Properties
When GST/HST applies to your purchase
Mortgage for Tax Sale Property
Financing options for tax sale buyers
Environmental Contamination Risk
Phase I ESA, contamination screening, environmental liens
Foreign Buyers Guide
Non-residents buying Canadian tax sale properties
Get Ontario Tax Sale Alerts
Be the first to know when new properties are listed in Ontario.
Municipalities with Active Listings
Due Diligence Tips
Essential research steps before bidding on any Ontario property.
Title Search
Conduct a title search before bidding to identify liens and encumbrances.
Verify Boundaries
Check property boundaries and access rights before bidding.
Environmental History
Research the property's environmental history for potential contamination.
Legal Advice
Consult a local real estate lawyer familiar with Ontario tax sales.
Account for All Costs
Factor in legal fees, potential repairs, carrying costs, and transfer taxes.
Site Visit
Drive by and observe from public areas to assess the property's condition.