About British Columbia tax sale properties

[Rob]

 - A property purchased as a tax sale property can be REDEEDED within a year.  If the property is bought back you will get the money you paid for the property and market interest for the period you held it.

 - You are taxed at fair market value of the property not the amount of money you paid for the property.

 - The minimum bid is the sum of all of the outstanding taxes on the property + penalties + an additional 5% penalty + land title fees. 

 - During the first year taxes are levied against the owner of the property. 
 
 - You do not own the property until the 1 year redemption period ends.  So all additional features and improvements you add to the property may be lost if the property is bought back.


 

[dukeyduke]

It is my understanding (from other posts) that tax sales cause all non-governmental liens and mortgages to fall off of the property.  How do these mortgages re-attach if the property is bought back? 
DD

[gap]

Yes, all non-crown leins fall off the property title and have no claim after a property is sold in a tax sale.   For example, if you buy a  property that has an existing mortgage on it at a tax sale, you will not be paying off the mortgage.   If however, there is a Revenue Canada lein against the property, you become the owner of the lein after buying the property - which is why you should due your due diligence (homework) BEFORE you send your 20% to the town as a deposit on a tender.
You want to check the title (a lawyer can do it for you for $50-60, or you can do it yourself on the computer.   I think the website is listed somewhere on this forum.  I usually call a lawyer friend, so I can't remember the name of the website.   Second, you should do an writ execution check (2nd type of search) which you should also do through the website or your lawyer.
Then, and only then should you place your tender.   
Hope this helps.

[dukeyduke]

Thank you for the good advise on due diligence and the confirmation that all non-governmental liens disappear during the taxsale process.  I can only assume that the lender of the mortgage would need to write off the loss as part of financial reporting.

Just out of curiosity… what happens in the case of a redemption by the original owner after the tax sale?  Rob has stated in the start of this string that “You do not own the property until the 1 year redemption period ends”.  So if a redemption is done 363 days after the sale and the bank has already written off the mortgage, the buyer would get his money back plus interest but would the original owner get the property back without the mortgage? 

On another note, is the right of redemption transferable to another person (ie and investor)?

DD

[ClearTitle]

Hi,

Just wondering if that website referred to by Gap for search titles is in fact applicable to Ontario properties? If so, could someone post the link, that would be greatly appreciated!

Thanks, and thanks for the great advice, I love this site!

[gap]

I's somewhere else in this forum, but it's bdc-canada.com.   Also, I neglected to say that one should also do a formal search called  a Writ of Execution on the property in addition to the title search for your due diligence.