||Property Tax Arrears: Collection Process
In the City of Toronto, approximately 96% of all property owners pay their property taxes on time.
The City takes action to collect overdue property taxes.
It is important to note that payments received are applied to the oldest outstanding balance first in accordance with the provisions of the City of Toronto Act, 2006.
If a property owner does not pay their property taxes by the instalment due dates,
the following actions will be taken:
Property Tax Fees
Largest Debtor's Report
- Penalty/Interest Charges
- Property Tax Account Statements
- Collection Letters and Telephone Contact
- Final Notice
- Issuance of Tax Arrears to a Bailiff
- Municipal Tax Sale Proceedings
|1. Penalty / Interest Charges
A penalty of 1.25% on the unpaid amount of an
instalment will be added on the first day after the
instalment due date. A further 1.25% of the outstanding
amount will be added as interest on the first day of
each month thereafter, as long as taxes remain unpaid.
Monthly interest charges are also imposed on any
unpaid taxes from prior years. Penalty and interest rates
are set by City by-laws, pursuant to the City of Toronto
Act, 2006. Penalty and interest charges on overdue
amounts cannot be waived or altered.
If taxes and charges are overdue, payments are applied
to the oldest outstanding balance first. Fees may also be
added when taxes are outstanding.
|2. Property Tax Account Statement
|Property Tax Account Statements (formerly known as Statements of Tax Account) are mailed to property owners in arrears advising that their property taxes are overdue.
These statements are mailed:
At the beginning of each year
(on tax accounts with an overdue amount as at December 31st)
After the 1st Instalment due date of the Interim Tax Bill (March)
After the 3rd Instalment Due Date of the Interim Tax Bill (May)
After the 1st Instalment Due Date of the Final Tax Bill (July)
After the 3rd Instalment Due Date of the Final Tax Bill (September)
If a statement is issued to you, a fee will be added to your property tax account to cover the cost of producing and mailing the statement. This fee will be included in your statement amount.
Statement Fee: $16 each statement
|3. Collection Letters and Telephone Contact
A Revenue Collector may contact owners of accounts with outstanding current year taxes, by way of phone calls or letters, to arrange either full payment or a firm, suitable payment arrangement.
|4. Final Notices
Final Notices - Residential Property
Final Notices are issued as one last notification to the property owner of their outstanding balance prior to the issuance of tax arrears to a Bailiff.
In or around April of each year, Final Notices are mailed to those residential property owners with a previous year's outstanding balance.
The Final Notice advises that they have 21 days to pay their taxes, or enter into a firm, suitable payment arrangement with the City,
or their account will be issued to a bailiff for collection.
All accounts that fail to respond to the Final Notice are issued to a bailiff beginning in May.
Final Notices - Non-Residential Properties
In November of each year, "Final Notices" are mailed to all non-residential property owners with a current year's outstanding balance.
The Final Notice advises that they have 21 days to pay their taxes, or enter into a firm, suitable payment arrangement with the City, or their account will be
issued to a bailiff for collection.
All accounts that fail to respond to the Final Notice are issued to a bailiff beginning in January of the following year.
If a Final Notice is issued to you, a fee will be added to your property tax account to cover the cost of producing and mailing the notice. This fee will be included in your statement amount.
Final Notice Fee: $21 per notice
|5. Issuance of Tax Arrears to a Bailiff
| A bailiff serves a Notice of Issuance to Bailiff:
If a residential property owner fails to respond to the "Final Notice" and has outstanding taxes from the previous year in the amount of $100 or more, the account is issued to a bailiff.
The City will issue a Notice of Issuance to Bailiff to the taxpayer indicating that their outstanding tax balance has been issued to a bailiff,
and that any further payments on the outstanding amount must be made to the bailiff for collection of unpaid amounts.
If a non-residential property owner fails to respond to the "Final Notice", the City will issue a Notice of Issuance to Bailiff to the taxpayer indicating that their outstanding tax balance has been issued to a bailiff,
and that any further payments on the outstanding amount must be made to the bailiff directly.
If a Notice of Issuance to Bailiff is issued to you, a fee will be added to your property tax account to cover the cost of producing and mailing the statement. This fee will be included in your statement amount.
Notice of Issuance to Bailiff Fee: $56 per notice
Information on Bailiffs
The City of Toronto Act, 2006 permits municipalities to use the services of a bailiff in the collection of property tax arrears.
A bailiff is a duly appointed agent under contract with the City of Toronto to recover outstanding property taxes.
The costs of the bailiff service are the full responsibility of the property owner.
Bailiff tax recovery actions include:
- Serving a Warrant to Distrain for Taxes to the assessed address advising the property owner of default of such outstanding taxes, penalties and lawful cost of said distress.
- Mailing notices to the property owner advising that a warrant has been issued and the amount of the warrant.
- Title searches.
- Telephone contact with the property owner(s), mortgage holder(s) and all other parties that appear on title.
- Site visits.
- Attornment of Rent(s) (i.e. if a property is tenanted, the bailiff can direct the tenant(s) to submit rent payments to the bailiff. These attorned rents are then applied against the outstanding property taxes).
- Issuing a Warrant to Distrain Goods/property (i.e. the bailiff can register a common law lien against goods/property located in or on an owner's property).
- Issuing a Warrant to Seize Goods/Chattels (i.e. the bailiff can physically seize and remove goods/chattels from the property and ultimately sell items seized to recover the tax arrears.
|6. Municipal Tax Sale Proceeding
Once all other collection efforts are exhausted, and the City has been unable to secure payment of the tax arrears, or a firm,
suitable repayment plan, the City commences Municipal Tax Sale Proceedings as prescribed by the City of Toronto Act, 2006.
Municipal Tax Sale proceedings can begin once taxes have been in arrears for at least three years. The first step in the Municipal
Tax Sale process requires the City to register a Tax Arrears Certificate on title of a property.
The debtor has one year from the date of registration of a Tax Arrears Certificate on title of the property to pay the
cancellation price (which includes all of the taxes levied and outstanding, all accrued penalty/interest and costs).
Failing payment within that year, or the entering into of an extension agreement, the Treasurer is required to proceed with a
sale of the property through a public auction or public tender.
Property Tax Fees
At its meeting on October 22, 2007, Toronto City Council adopted the following fees:
|Property Tax Account Statement (formerly Statement of Tax Account)
||$16 per statement
||$21 per notice
|Notice of Issuance to Bailiff
||$56 per notice
Largest Debtor Report
The Director of Revenue Services is required to:
- Submit a public report to the Government Management Committee on a semi-annual basis identifying
those properties owned by a corporation with tax arrears of $500,000 or more. View report.
- Submit a report to Committee identifying those properties owned by individuals with tax arrears of $500,000 or more.