Property tax is owed to your municipality and is secured against your home, so it can’t simply be ignored. This page explains what happens if it goes unpaid, using the rules in Ontario and British Columbia, and what to do if you’re behind. Rules and timelines differ in other provinces and by municipality, so check with your municipal tax office.
Penalties and interest
Municipalities set their own late charges within provincial limits. In Ontario, the Municipal Act allows a penalty of up to 1.25% of the taxes due when you miss a payment, and interest of up to 1.25% a month on the unpaid taxes (s. 345).
At the Ontario maximums, on $6,000 of unpaid tax, a year’s charges come to $975: the one-time penalty plus 12 months of interest on the $6,000. Your municipality’s rates may be lower.
A lien ahead of your mortgage
In Ontario, taxes are “a special lien on the land in priority to every claim, privilege, lien or encumbrance of every person except the Crown” (s. 349(3)). That means unpaid property tax ranks ahead of your mortgage, which is why lenders pay attention to it. Your mortgage terms set out what your lender can do if taxes go unpaid.
Tax sale in Ontario
- If any tax arrears are still owing on January 1 of the second year after the taxes became owing, the municipality can register a tax arrears certificate on title (s. 373).
- If the cancellation price (the arrears plus costs) isn’t paid within 1 year of registration, the property is sold by public sale (s. 379).
- Before that year is up, anyone can have the certificate cancelled by paying the cancellation price, and the municipality can make an extension agreement with the owner, a spouse, a mortgage lender or a tenant (s. 375, s. 378).
Tax sale in British Columbia
In BC municipalities, taxes still unpaid on December 31, two years after the year they were imposed, are delinquent. Each year at 10:00 a.m. on the last Monday in September, the municipal collector auctions properties with delinquent taxes. After the sale, the owner has a 1-year redemption period to reclaim the property by paying more than the original delinquent taxes (BC).
If you're behind
- Contact your municipality’s tax office and ask about a payment plan or installments.
- If your lender pays your taxes through your mortgage payment, talk to your lender.
- Check for deferral programs. BC’s property tax deferment program is a loan that lets homeowners who are 55 or older, surviving spouses, people with disabilities, and some families with children defer their property taxes. Other provinces and municipalities have their own programs.
- Get advice on your other debts. A licensed insolvency trustee or credit counsellor can help if you’re behind on several bills.