A tax based on the estimated value of the property is called property tax. The primary reason local governments collect property taxes is to pay for necessary services like local police enforcement, trash collection, schools, and waste collection. Each municipality determines the tax rates for the municipal share.
Paying tax is necessary for each homeowner residing in Canada. There can be serious consequences if your property taxes are not paid. In truth, local governments depend on homeowners’ timely tax payments to cover their costs.
In this article, read about Canadian property tax rules, tax arrears, consequences of not paying it and what to do if you can’t afford to pay them.
Canada Property Tax
An education portion and a municipal portion make up the two halves of the property tax in Canada. A portion of the rate is established by the upper-tier municipality in a two-tiered municipality, and a portion is set by the relatively low municipality.
The Ontario primary and secondary education system is supported by the rates for the education portion of the tax, which are set by the minister of finance. Property taxes are computed by multiplying a property’s current value assessment, as calculated by the Municipal Property Assessment Corporation.
Non-Payment of Property Taxes
Your local government will begin seeking compensation after you fall behind on your property taxes. For instance, they may impose significant interest rates and penalties in an effort to induce payment. See the property tax requirements and property tax arrears in Ontario, and if you are not capable of paying these taxes, see a mortgage broker.
The municipality or city will also record a tax lien on your house. To be clear, a tax lien, also known as a tax arrears certificate, prevents the sale of your house until your back taxes are settled. A property tax lien is given precedence over all other liens against your home.
Property Tax Loan
Loans for property taxes are difficult to obtain. especially given that the majority of mortgage lenders don’t want to deal with someone else’s hassle. However, some lenders will accept mortgage refinancing and home equity loans to combine back taxes.
Finding a mortgage broker that specialises in these secured loan types is crucial. If you don’t, you’ll waste time and put yourself in a worse dilemma. A good mortgage broker network focuses on assisting difficult-to-approve property owners. In truth, they concentrate on assisting clients who are stuck in:
- Property tax certificates and tax arrears
- Mortgage defaults
- Foreclosure and power of sale
Undoubtedly, having unpaid property taxes is a bad situation, but there are steps you can take to save your belongings.
Can You Lose Your Home in a Property Tax Sale?
You will quickly come to understand the strength of a municipality’s collection abilities if you have outstanding taxes on your property. You will learn specifically that the government has the option to foreclose on the property through a municipal tax sale.
Conclusion
Non-payment of property tax in Canada is prohibited as per law which may lead to losing your home or property. If you can’t pay it, contact a good mortgage broker network to get rid of this dilemma easily.