Ontario Tax Sale Property Forum
Tax Sale Forum => Questions and Answers => Topic started by: Dave2 on August 28, 2018, 10:49:05 PM
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One of the risks with tax sales is the risk of buying an environmentally contaminated property. While knowledge is not perfect
one of the possible warning signs is a minimum bid that seems out of whack with the underlying value (i.e. assessed value). As an possible example consider the upcoming bid in Owen Sound. Key Statistics are:
Annual Taxes: $1,600
Assessed Value: $97,000 for a vacant building lot
Minimum Bid: $53,000 or equivalent to over 30 years of unpaid taxes at todays rate or probably over 50 years of historical
average tax rates.
Now ask yourself why?
Possiblities: a) They have a reduced rate for seniors that is paid on sale or title transfer and someone lived a very long time.
b) The municipality has had some extraordinary expenses such as remediation of environmental contamination.
c) Other unknown cause
Because of this I am very careful about bidding with this type of situation.
Note zoning on this property does not permit development and it must be kept in its natural state. It is even classified as hazard lands.
BTW anyone know what caused this as I thought that municipalities had to have legitimate expenses for a tax sale value?
I wonder if the municipality maybe wants the property but this is pure speculation.
Just curious.
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Dave
You are an astute student. As this is considered 'hazard land' and can't be built on it should either carry an assessment of $1....or more appropriately fall under Municipal/Conservation ownership. The map does clearly show it as being in a flood plain....and the rain falls mainly on the plain, in Spain.
The details of the past ownership, use, and incorrect assessment on the property and the total quantum of the cancellation price are in (in this case) redundant as no one should consider bidding on this (as D. Trump would say) shit-hole.
The tax sale process has been used as a rather inexpensive means of land expropriation in the past, and this could be one of those situations.
8)
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Dave
You are an astute student. As this is considered 'hazard land' and can't be built on it should either carry an assessment of $1....or more appropriately fall under Municipal/Conservation ownership. The map does clearly show it as being in a flood plain....and the rain falls mainly on the plain, in Spain. 8)
Frank:
I agree I have a lot to learn. What is frustrating about this business is you have to have good skills on the sell side as well as the (taxsale) buy side. After getting beat up by a potential buyer
who wanted over $100,000 in mortgage loans and went ballistic because I wanted a credit check sometimes I wonder what I am doing wrong. ???
Dave