Insuring a Tax Sale Property

[nimai]

Hi There,

Has anyone tried to get Home Owner's/Property Insurance for their newly acquired Tax Sale Property? What about liability and people going onto the property or falling trees onto someone else's property, etc.?

Nimai

[Frank]

questions, questions, questions   

1.  Land transfer tax is applicable to all property transactions in Ontario.  To calculate go to http://www.macnaughtonlaw.com/landtax.htm  there is an escalating scale depending on the value of your property.

2. Capital gains come into play when you sell property that is not your principal residence.  Essentially you take your net profit from the sale of your property (sale price less all of your costs), then divide it in half and you pay tax on that amount.  If your paying tax it means you've made some money - and that ain't so bad.  Go see a tax accountant for more information on this, be careful as your sale could also be deemed to be income if buying and selling is your business and in that case you pay tax on all of your net profit.

3.  As to getting rid of existing tenants and/or owners - there have been previous posts on this subject which you should read.  This becomes a civil matter.

4.  Best talk to your insurance company on the issue of getting coverage.  They are unlikely to insure it until you actually own it, and if there is someone living there that you have to get rid of it could make it more difficult.  Not a problem with vacant properties.

5.  Banks won't usually give you money on properties that they can't view, therefore getting mortgages on  the property within the 14 days is next to impossible.  You shouldn't even think of bidding on a property unless you have the resources available to come up with the cash.  This may involve leveraging other properties that you own, or borrowing from some other source that trusts you on a personal basis (be careful here as well).

6. As to the personal items which might have been left on the property - their yours to do what you want to with.  You have no recourse to the previous owner as you bought the property as is.