Property Tax Arrears in Ontario: How to Catch Up Before a Tax Sale (2026)

Property taxes are easy to fall behind on — there's no monthly statement nagging you, and a missed instalment quietly accrues penalties until the balance is suddenly large. In Ontario, unpaid property taxes can eventually cost you your home through a municipal tax sale. The process is slow and very rule-bound, which means you usually have time to fix it — if you understand the timeline.

The short answer

Ontario municipalities can sell a property for unpaid taxes, but only after years of arrears and a formal one-year redemption window. You can stop it at any point before the sale by paying the "cancellation price" — and if you have home equity, a refinance or private mortgage can raise that amount and clear the arrears entirely. See property tax arrears financing.

How property tax arrears escalate in Ontario

Under the Municipal Act, the process runs in stages:

• Penalties and interest start accruing on the unpaid balance right away, month after month.
• Tax arrears certificate. Once a property has been in arrears long enough (generally around three years), the municipality can register a tax arrears certificate against the title.
• One-year redemption period. After the certificate is registered, you have roughly one year to pay the full "cancellation price" — all arrears, penalties, interest, and costs — to stop the process.
• Tax sale. If it isn't paid, the municipality can sell the property by public tender or auction to recover the taxes.

The exact timing varies by municipality, so always confirm your specific dates with your city or town. The key point: there is a hard deadline, and the cancellation price only grows.

How to catch up

1. Pay the arrears directly

If you can cover the balance, paying the municipality stops everything. Some municipalities will also set up a repayment plan before a certificate is registered — ask early.

2. Refinance to clear the arrears

If you have equity, a refinance can pay the full cancellation price and fold it into your mortgage, replacing an urgent municipal deadline with a normal monthly payment. How refinancing works.

3. Second mortgage or HELOC

To avoid breaking a low-rate first mortgage, a second mortgage or HELOC can raise just the arrears amount behind your existing mortgage.

4. Private mortgage (fast, equity-based)

If a tax arrears certificate is already registered or the redemption deadline is close, a private mortgage can fund in days against your equity, pay the municipality, and buy you the room to refinance to a bank afterward.

Property tax arrears vs. CRA tax debt

These are two different problems people often confuse. Property tax arrears are owed to your municipality and escalate to a tax sale under the Municipal Act. CRA tax debt is owed to the federal government and is collected very differently — frozen accounts, wage garnishment, and Federal Court liens. If your issue is with the CRA rather than your city, start with using a mortgage to pay CRA tax debt and what happens if you don't pay the CRA.

Why acting early protects your equity

A tax sale, like a power of sale, is a forced-sale process — and forced sales rarely capture full market value. The earlier you refinance or arrange financing, the more of your equity you keep and the cheaper your options are. Waiting until the final weeks of the redemption period narrows everything.

Frequently asked questions

How long can property taxes go unpaid in Ontario before a tax sale?

Generally a property must be in arrears for about three years before a municipality registers a tax arrears certificate, after which there's roughly a one-year redemption period before a sale. Timing varies by municipality, so confirm your dates.

Can I refinance to pay off property tax arrears?

Yes. If you have equity, a refinance, second mortgage, or private mortgage can pay the full cancellation price and clear the arrears — replacing the municipal deadline with a regular mortgage payment.

Can I stop a tax sale after the certificate is registered?

Yes. Paying the full cancellation price during the one-year redemption period cancels the certificate and stops the sale. Equity-based financing can raise that amount quickly.

Is property tax debt the same as CRA debt?

No. Property taxes are owed to your municipality and lead to a tax sale; CRA debt is federal and is collected through garnishment, account freezes, and Federal Court liens. The financing fixes are similar, but the processes are separate.

Behind on property taxes? Explore property tax arrears mortgage solutions or talk to us confidentially — we'll help you clear the arrears before a tax sale and protect your equity.