Falling behind on your municipal taxes? You’re not alone, but waiting too long to act could put your home at serious risk. Many banks and traditional lenders will refuse to help if you’re behind, but there are still property tax arrears solutions available in Ontario.
At LendToday, we help homeowners access fast, reliable financing — even if the bank said no. Whether you’re already facing a tax lien or trying to avoid a tax sale, this guide breaks down everything you need to know.
What Are Property Tax Arrears?
Property tax arrears occur when a homeowner fails to pay their municipal property taxes on time. These taxes are typically due in installments and are based on:
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The assessed value of your property
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The local tax rate set by your municipality
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The taxable portion of your home
While property taxes fund essential services — like garbage pickup, snow removal, fire departments, and public parks — they’re often overlooked or deprioritized during financial hardship.
Why Property Tax Arrears Are So Dangerous
Unpaid taxes may seem manageable at first, but the consequences add up fast:
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1–2% monthly penalties on the overdue amount
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Interest compounding until the taxes are paid in full
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Risk of a Tax Arrears Certificate after 2–3 years of non-payment
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The municipality can register a lien against your property
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Eventually, your home can be sold in a tax sale, sometimes below market value
That’s why it’s crucial to explore property tax arrears solutions before legal action begins.
When Is a Property Tax Sale Triggered?
In Ontario, municipalities can start the tax sale process if taxes remain unpaid for three years. They issue a Tax Arrears Certificate, giving you a one-year deadline to pay the full amount, including interest and fees.
If that one-year period passes without full repayment, your property can be sold at public auction. There is no obligation for the city to get fair market value — their priority is simply recovering the amount owed.
How to Confirm Your Tax Arrears
Before exploring property tax arrears solutions, confirm how much you owe. Follow these steps:
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Call your city’s property tax department.
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Request an updated balance and a letter confirming the arrears.
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Let them know you’re actively working to repay the amount.
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Ask if they offer a pre-authorized monthly payment plan.
Keeping open communication with your city shows you’re serious about resolving the issue.
Best Property Tax Arrears Solutions in Ontario
If you don’t have the funds on hand, don’t panic. There are several effective property tax arrears solutions designed for homeowners with equity, even those with bad credit or previous bank denials.
1. Home Equity Loan
A home equity loan lets you borrow a lump sum against your property’s value. It’s ideal for covering one-time expenses like overdue taxes.
Best for: Owners with significant equity who need immediate relief.
2. Second Mortgage
A second mortgage is another loan secured against your home, separate from your existing mortgage. It offers flexible terms and fast approvals through private lenders.
Best for: Homeowners who want to avoid refinancing their first mortgage.
3. Home Equity Line of Credit (HELOC)
A HELOC gives you access to a revolving line of credit using your home equity. You only pay interest on what you borrow.
Best for: Ongoing or unpredictable expenses related to arrears or home repairs.
4. Mortgage Refinance
If you qualify, refinancing your current mortgage into a new one can help consolidate your arrears into one manageable payment.
Note: Most banks won’t refinance homes in tax arrears, but private lenders can offer a solution.
Why Credit Cards Are the Wrong Option
Using credit cards to pay off property tax arrears is tempting — but costly. With rates over 12–24%, the interest adds up quickly and creates long-term financial strain.
Instead, turn to lower-interest home equity-based solutions that won’t drain your monthly budget.
After You’ve Paid Off Your Tax Arrears
Once your taxes are current, preventing the problem from recurring is important. Here’s how:
✅ Direct Installment Plan
Most Ontario municipalities allow you to set up monthly auto-withdrawals from your bank account, helping you stay ahead of future payments.
✅ Mortgage Lender Collection
If your mortgage is with a traditional lender, they may already collect property taxes as part of your monthly mortgage payment.
Ask your lender if a tax component is included — if not, request one to avoid surprise lump sums.
Special Tip for Landlords with Rental Properties
If you own a rental home, staying on top of property taxes is even more important. Falling into arrears could:
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Trigger concern from tenants
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Jeopardize your rental income
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Lead to legal complications
Protect your income stream by using property tax arrears solutions before things escalate.
Get Help Today from LendToday
At LendToday, we specialize in helping homeowners who are behind on property taxes, facing foreclosure, or navigating difficult financial circumstances that traditional lenders won’t touch.
Whether you’re dealing with tax arrears, credit challenges, or urgent deadlines, our team takes a personalized approach to find the right solution for your situation. We work with a trusted network of private and alternative mortgage lenders who provide fast, flexible funding — even when the banks have said no.
If you’ve received a tax lien, Notice of Sale, or Power of Sale notice, time is of the essence. Every day counts when your home is on the line. We’ll walk you through the process, explain your options, and help you access the equity you need to bring your taxes current and protect your property.
Frequently Asked Questions (FAQ)
What is the best solution for property tax arrears in Ontario?
The best solution depends on your equity and financial situation. Many homeowners choose a home equity loan, second mortgage, or HELOC to clear their arrears quickly.
How long do I have before my property is sold due to tax arrears?
You have three years of unpaid taxes before a Tax Arrears Certificate is issued. After that, the city can begin the sale process if payment isn’t made within one year.
Can I get a mortgage if I’m behind on property taxes?
Most banks won’t approve financing if you’re in arrears. However, private mortgage lenders often will, especially if your home has enough equity.
Is it possible to negotiate with the city?
Yes. Many municipalities offer payment plans and may delay legal action if you demonstrate intent to pay.
Can property tax arrears affect my credit score?
While tax arrears themselves don’t appear on your credit report, a tax lien or forced sale can damage your financial reputation and future lending options.
Apply To Clear Property Tax Arrears
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