The following notes are intended to provide a general outline of the tax sale process.
For more information about the annual sale of properties, prospective purchasers should consult the Local Government Act, Part 16, S645.
- The City is required by the Local Government Act to sell at Tax Sale, all properties whose taxes have not been paid for 3 years.
- The Local Government Act gives the Collector authority to sell a property for the Upset Price which equals all outstanding taxes + penalties + interest + 5% tax sale costs + Land Title Office fees.
- All property sales are "as is" without warrant or guarantee by the City of Colwood
- The Local Government Act requires municipalities advertise in 2 issues of a local paper. The last publication must be not less than 3, or more than 10 days prior to the Tax Sale.
- The legal description and street address of the property subject to tax sale must be published.
- To avoid a property being listed in this ad in the paper, property owners must pay delinquent taxes approximately 2 weeks prior to the Tax Sale date.
- A public auction will be held at 10am, on the last Monday in September each year in Council Chambers, City Hall.
- Bidding is accepted on all properties.
- Prospective bidders are advised that it is their responsibility to search the title of the property in advance to determine if there are any charges registered against the property.
- The minimum bid is the amount of the upset price.
- If no bidding takes place within 3 calls by the Collector (auctioneer), the City is declared the purchaser at the upset price.
- The successful bidder is required to have their SIN or BN, and their corporate seal if required.
- Payment is to be in the form of cash or certified cheque for the purchased price at the close of the Tax Sale.
- If full payment is not received by 2:00 pm on the day of the Tax Sale, the Collector again offers the property for sale.
Notifying Charge Holders
- The Collector is required by law to search all property titles and within 90 days after Tax Sale to notify all registered charge holders shown on each property.
- The original owner has one year after the property is sold at Tax Sale to pay the taxes and buy back their property. This is called redemption.
- All registered charge holders have full right to redeem the property.
- To redeem the property, the charge holder must remit the full upset price, plus interest on the purchase price at a rate set by the Province, within one year of the Tax Sale.
- If the property has been sold at Tax Sale, and the City has been declared the purchaser, 50% of the upset price, plus interest may be paid as an installment thus extending the redemption period by 11 months and 21 days. This applied only to properties having improvements.
- As soon as the property is redeemed, the Collector will refund to the Tax Sale purchaser the purchase price, plus interest to the date of redemption.
Rights During Redemption Period
- The Local Government Act provides that when real property is sold at Tax Sale, all rights held by the person who at the time of the of the sale was the owner, immediately cease to exist, except for the right of redemption, the right to bring an action to set aside the Tax Sale, and the right to possession.
- The registered owner's right of possession is subject to the purchasers right to bring action against the original property owner for waste (i.e. damage or destruction to the premises) and the right of the purchaser to enter onto the property to maintain it in the proper condition and to prevent waste.
- Damage, destruction or loss of property during the redemption period is at the risk of the purchaser. The purchaser is advised to insure his interest in the property.
Property Not Redeemed
- If the property is not redeemed during the one year period, the Collector registers the new owner at the Land Titles Office in Victoria, thus cancelling all previous registered charges, except for those matters set out in the Land Title Act and any lien of the Crown, an improvement district or a local district.
- The new owners are required to pay the property tax sales tax to the Provincial Sales Tax Administrator after application has been made to register the Land Titles Office.