The Complete Guide to Buying a Home at Tax Auction

By Andrew Mitchell | Real Estate Investing

In real estate there are always opportunities for savvy investors to make money. One way to get an incredible deal is to attend one of several real estate tax auctions in Montreal. There are several that take place each year where houses are put up for bidding. But what exactly is a tax auction? How does it work? and What’s involved with buying a home at tax auction? And are the deals as good as they seem?

In the Montreal area many of these auctions take place in November and December (and some in the summer) each year.

I’m here with this complete guide to show you how it all works and how you might be able to buy an incredible deal!

The Process

The  Cities and Towns Act (C-19) permits municipalities to recover taxes owed to them by property owners through the sale of properties for non-payment of taxes. No legal judgement is necessary to proceed with the tax auction sale but there is a strict method on how the tax auctions must take place.

When a municipality has unpaid municipal taxes due from a homeowner and the delinquent homeowner has not paid off their debts after 6 months, the municipality may put up the property for sale for the taxes due at a public auction. The list of delinquent properties is published after 30 days along with the date, time and location for the auction. The municipality must publish the notice in the local paper at least twice and the last publication must be a minimum of 15 days prior to the scheduled tax auction date.

Delinquent owners have until the auction date to settle up their debts including any interest and fees or their property goes on the auction block.

Delinquent owners have until the auction date to settle up their debts including any interest and fees or their property goes on the auction block.

The municipality itself may bid on the property but they are not permitted to bid more than the total of the taxes owed, interests and fees, and any liens up to the total amount owed in taxes.

Any mortgage holders on the property are also advised of the auction and most end up paying the taxes owed for the owner to not lose their mortgage claim on the property.

The cities and municipalities publish the list of delinquent properties months in advance of the eventual auction date. The homeowner and interested parties may see this list and request more information but they may not formally inspect the property before the auction. The threat of the homeowner losing their property (and potentially the embarrassment of having their name and address published for non-payment) is usually encouragement enough and most properties published on the list are taken off before the auction date, as the owners pay up their bills in time.

In some municipalities there could be dozens or even hundreds of properties on the list to be auctioned off but by the time the auction date arrives there might only be a small handful if any at all that remain unpaid. Most banks will pay up the taxes due if the homeowner does not, to not lose their claim to the property.

But those that don’t pay up in time are put up for auction by the city.

Buying real estate at Montreal Tax Auctions.

Buying real estate at Montreal Tax Auctions.

Where to get the list of properties

The list of properties that will be put up for tax auction is usually published twice in print in the local newspaper and twice online well in advance of the auction, the best place to find the list is from the city’s own website. Although many have already taken place, it could be helpful to check for next year.

Here are some of the links to the lists in the West-Island and surrounding areas (I’ve included the link to the notices themselves, but as these links are all PDF files and might change I’ve added the city’s main website too so you can search for the list – they are usually in the Public Notices section):


Date of Auction

List of Properties

November 9

In person or in La Presse

For other cities and municipalities contact their respective city halls for more information.

How to Buy a House at Tax Auction

Frequently Asked Questions

When does the auction take place?

The auction takes place at the date, time and location specified in the notice published by the city. You or your representative must be present at the auction site to participate. Generally the city will request that you be present several hours before the auction or the morning of, to register.

What do I need to bring to the auction?

You must bring a legal ID – Canadian passport, medicare card or drivers license. If you have a representative in your place that person must have a legal power of attorney or mandate to act on your behalf.

How is payment made?

Payment is made by certified cheque, bank draft or cash at the conclusion of the auction. Verify with the city what payment methods are acceptable. Credit cards or other credit products are not accepted generally. Buyers must have certified cheque, bank draft or cash on hand for an amount higher than or equal to the auction price.

If you buy a property and your cheque is higher than the amount you bought at the city will refund you the difference usually within 10 days or the amount can be retained and used for another purchase at the same auction on a different property.

What happens if you don’t have enough to cover the price?

If a bidder doesn’t have enough to cover the purchase price the property is put back into the pool to be auctioned again right away. The original bidder will also be responsible to pay any difference between their bid and the bid of the new buyer if the new buyer’s bid is lower.

Who can buy at tax auctions?

Anyone except for the current owner, any person responsible for managing the property, the city clerk or person conducting the sale.

Can I inspect the property before bidding?

No the property is sold as is without legal warranty at the risks and perils of the buyer. Which means you are responsible.

If I win the auction is the house now mine to keep?

No, the existing owner has one year in order to pay back what is owed.

What if there’s problems with the house and I no longer want it?

At the tax auction, the property is sold as is without warranty at the risks and perils of the buyer. Any issues are yours to deal with.

Can the original owner get the house back?

Yes, the original owner has one year from the date of the auction to pay back all amounts owed, including the auction price, taxes and additional fees as well as paying the current owner 10% interest on his purchase price rounded up to one year, even if paid in advance of one year.

The current owner and the previous owner can agree to transfer the house legally to the new owner before one year as well.

Who is responsible for the mortgage?

If there is any existing mortgage it is cancelled at the time of the sale.

Who pays the legal/notary fees?

The new owner is responsible for the legal fees after one year to become the true owner of the property. If there are any legal fees prior to the one year and the old owner wants to buy back his house, the old owner is responsible for them.

Are Tax Auctions Worth it?

As a real estate investor tax auctions can really be a great investment if you are able to obtain the property after the one year, though usually the original owner does pay back the new owner in time. It is quite rare that it ends up not being paid back.

But even if the old owner does obtain it, you’re still guaranteed a good, completely safe return on your money at 10% interest, and that’s the worst case, the best case is you obtain a home for pennies on the dollar.

If you’re interested in getting more information on tax auctions or other real estate investment techniques, I invite you to contact me or sign up for our newsletter for more tips and guides to smart real estate investing.

If you’ve bought a property at auction or know someone who has, I would love to hear your story in the comments below. Did it work out in the end or did the original owner buy back the house before the deadline?
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About the Author

I'm Andrew Mitchell, Chartered Real Estate Broker and Owner of Vistacor Realty Group. I help buyers, sellers and investors in the West Island, Montreal and Vaudreuil-Soulanges areas buy and sell homes. My goal is to provide you with useful, straight-forward insights and relevant real estate market updates. Contact me with any questions. Follow me on twitter here.