What to Do When You Fall Behind on Property Taxes? Avoid the risk and take quick action

Feb 6, 2017

Let’s face it—nobody loves paying property taxes. However, the money you pay in each year goes toward funding important efforts, including public schools, police and fire services and even utilities.

But if you get into a situation in which you’re unable to pay your property tax bill, you could be at risk of losing your home through a government seizure and sale. Thus, it’s critically important that you take action as soon as possible when you know you are going to be unable to pay your property taxes. You may be able to save your home and reduce the amount of penalties levied against you.

Applying for a tax abatement

This is the first step you should take. When you receive a tax abatement, your local tax authority will forgive a portion (or potentially all) of your property tax obligations. The application process and eligibility criteria varies based on where you live, but generally, you will need to document your assets and your income to prove that you are actually unable to repay the property tax you owe.

If you have a large amount of equity in your home or substantial personal assets, the government may deny your request for an abatement. It’s certainly worth trying no matter what, however.

Inquire about hardship programs

The city of Toronto has a number of hardship programs available, giving homeowners much-needed assistance if they are struggling to pay their property tax bill. These programs help low-income seniors and people with disabilities in particular, although relief is available to a wide range of individuals and families.

These programs include the following:

  • Property Tax Increase Deferral: When you apply for a deferral of property tax increases, you can reduce the payments you owe. However, the government will place a lien on your property, and it will need to be repaid to the city. There are strict eligibility requirements, so contact the city to learn more.
  • Property Tax Increase Cancellation Program: If you are designated as a Toronto homeowner in need, you may be able to have your property tax increases canceled. To qualify, you must have a household income less than $38,000/year, have a residential assessment of less than $650,000 and be over the age of 65 (or between 60 and 64 and receive income under the OAS Act). You may also qualify if you’re a person with a disability and in receipt of disability benefits.

Apply for a loan and refinance your mortgage

In some cases, you may benefit from refinancing your mortgage with the help of a property tax lender or bank in Toronto. Property tax lenders may provide loans for homeowners for the specific purpose of paying off back taxes. Although refinancing your mortgage can be a challenge, it may be the best option to help reduce the possibility that you will lose your home.

Refinancing will give you a fresh start, and you will no longer have to worry about tax collectors. You will be able to pay off your outstanding property taxes and re-evaluate your financial situation to ensure that you do not fall behind again.

If you need guidance or would like to look at your options for refinancing, consult an experienced mortgage broker. The bottom line is that you should never ignore the issue of late property taxes in Toronto—the more time passes, the worse the situation will get for you.

 

Ivan Yakovlev, AMP is an experienced Toronto mortgage broker who provides a wide range of services to homebuyers throughout the region.

Share This:

house-with-dollar-sign (1)My Best Rates

Fixed

1 year 2.79%


2 year 2.04%


3 year 2.09%


4 year2.49%


5 year2.29%

Variable

3 year 2.10%


5 year 2.20%

HELOC

5 year 3.20%

Private Mortgage

Starting at5.99%

Ivan Yakovlev, AMP

ivan

After doing an undergrad degree at York University, I found myself looking at several career paths. I love being a mortgage broker in Toronto. What I do lets me make a tangible positive difference in people’s lives.

Contact Me

15 + 9 =

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *