Municipal Tax Sales, Failure to pay municipal property taxes for over three consecutive years results in a property being placed for tax sale in British Columbia. This can be an excellent opportunity for Canadian real estate investors, once they understand the local Government Act. This Act gives the collector the authority to sell a property for the upset price. The upset price is the total of all outstanding taxes plus interest, 5% of tax sale costs, and the Land Titles office fees.
There are some differences among various municipalities in the province of British Columbia, but the majority of them have similar rules. The rural areas have different tax sale rules as does the city of Vancouver, which has its own charter and rules. You can obtain more information from the surveyor of taxes.
The Act requires the municipalities to advertise in the local paper for no less three days and no more than ten days prior to the tax sale. For the property-owner, the delinquent taxes must be paid approximately two weeks prior to the tax sale; otherwise the property address will be advertised in the local paper.
Tax sales must follow certain rules. For a Canadian real estate investor, it is good to have proper education, knowledge, and an experienced mentor to guide you through the tax sales. The auction is usually held in the municipal office. The bids are accepted on all the properties. The bidders are advised to do the title search to determine any other mortgages, liens, judgments, and all other pertinent information registered against the property. The minimum bid is the amount of the upset price. If no bidding takes place within the three calls by the collector, the municipality is declared the purchaser of the upset price.
Upon successful bidding, the winning bidder must remit payment in full. If the bidder leaves the municipal offices without paying, the property can be offered again for sale. The collector is required by law to search the title of the property involved in a tax sale, and has 90 days after the tax sale to notify all the charge-holders of the registered property.
All registered charge-holders also have the right to redeem the property. The original owner has approximately one year after the property is sold as a tax sale to pay the taxes and buy back the property. As soon as a property is redeemed, the collector will refund the tax sale purchaser the purchase price, plus interest to the date of redemption.
Damage, destruction, or loss of the property during the redemption period is at the risk of the buyer. The buyer is advised to get proper insurance coverage to cover his interest in the property. The registered ownerâ€™s right of possession is subject to buyerâ€™s right to bring an action against the original owner for waste (damage or destruction), and the right of the buyer to enter onto the property to maintain it and in proper condition, and to prevent a waste.
If the property is not redeemed, the collector then registers the new owner at the Land Titles Office. At this time, the new buyer of the property is required to pay the provincial land transfer tax, and the properties are sold â€œas isâ€, without warranty or guarantee.
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Navtaj Chandhoke – Author, lead trainer, and entrepreneur extraordinaire, Navtaj has earned a reputation as the best in his field of Real Estate Investment. His seminars are routinely standing-room-only and his Real Estate Secret Seminars continue to grow in popularity in Canada & US. Navtaj is also the founder of the ,Professional Real Estate Investment Group (PREIG) Canada and World Wealth Builders, a world class Real Estate Investors education and mentoring institute.
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