Its Tax Sale Time

That time of the year in BC again folks. Check out your local municipality’s listings of Tax Sale Properties. If you are thinking that it’s a good opportunity to get some property on the cheap, know that sometimes the auction competition can be pretty hot, and that there are a number of rules that must be adhered to, both by the municipality and the buyer.

[ad#125-right]Another thing to note is that you don’t actually gain possession of the property until a year later, and within that year, the existing owner can make good on their delinquent taxes and fees. So it can be a bit of a gamble, but it has paid off for some in the past!

Here is some general information on tax sales in BC, for the legal jargon, check out Part 11 of the Local Government Act. (The following is provided for information purposes only, no decisions should be made without referring to the Local Government Act first!)

  1. The tax sale is a public auction of properties within
    a municipality which have outstanding property taxes from
    2 years prior to the current year.
  2. The tax sale is held annually on the last Monday of September at 10 a.m. at
    the council chambers in the Municipal Hall of each municipality in BC.
  3. Notice of the time and place of the tax sale and the description and street
    address of each property subject to tax sale must be published in at
    least 2 issues of a newspaper.
  4. The last publication of the tax sale must be at least 3 days and not more than 10 days before the date of the tax sale.
  5. The lowest amount for which a property may be sold at tax sale is the upset price.
  6. The upset price is the sum of all the property taxes outstanding as at the
    date of the tax sale, plus all applicable penalties and interest, plus
    an additional 5% of all taxes, penalties and interest, plus all
    applicable Land Title Act fees.
  7. The highest bidder above the upset price must be declared the purchaser.
  8. If there is no bid, or no bid equal to the upset price,
    the municipality must be declared the purchaser.
  9. The purchaser must immediately pay the amount of the purchase
    price to the collector.
  10. [ad#125-right]The collector must give the purchaser a tax certificate
    and promptly file the notice of tax sale at the land title
  11. With 3 months of the tax sale, the collector must give
    written notice of the tax sale, including the day the redemption
    period ends either, to the owner(s) of the property by
    serving the notice or by registered mail.
  12. During the period allowed for redemption, a tax sale property
    must continue to be assessed and taxed in the owner’s name.
  13. A tax sale property may be redeemed from tax sale within
    1 year of the date of the tax sale by the owner of the
    property, an owner of a registered charge against the property
    or another person on their behalf.
  14. The amount to redeem a tax sale property is the sum of the upset price,
    plus all costs of which the collector has had notice that have been
    incurred by the purchaser in maintenance of the tax sale property and
    in prevention of waste, plus taxes advanced by the purchaser, plus
    prescribed interest to the date of redemption.
  15. During the period of redemption, the owner retains the
    right to possession of the tax sale property.
  16. The purchaser has the right to enter on the tax sale property
    to maintain it in proper condition and to prevent waste.
  17. On redemption of a tax sale property, the purchaser is
    entitled to receive all amounts paid by the purchaser,
    together with prescribed interest.
  18. If the tax sale property is redeemed, the collector must
    promptly file a notice of redemption at the land title
  19. If the tax sale property is not redeemed, the collector
    must file a notice of non-redemption at the land title
  20. Upon receipt of a notice of non-redemption by the land title office, the
    property is conveyed to the purchaser free and clear of all mortgages,
    charges, liens, etc. except those imposed by a senior government
    (Province of British Columbia, Government of Canada).
  21. In the case of non-redemption of a property subject to the Strata Property
    Act, the Land Title and Survey Authority will not convey the property
    to the tax sale purchaser until all outstanding strata fees and charges
    have been paid to the strata corporation.
  22. The purchase of a tax sale property is subject to tax
    under the Property Transfer Tax Act on the fair market
    value of the property at the time of conveyance.
  23. During the period of redemption, the owner may bring an
    action in the Supreme Court to have the tax sale set aside
    and declared invalid under certain specified grounds.

Published by Mike Thomas

Mike Thomas P.Eng. ENV SP, is the author of and Director of Engineering at the City of Revelstoke in the Interior of British Columbia, Canada.