Behind on Property Taxes? It might feel like a minor issue at first—until the city starts adding penalties, sends collection notices, or places a lien on your home. If you’re receiving letters from the municipality or you’re worried about losing your home, you’re not alone.
Each year, thousands of Canadian homeowners fall into property tax arrears due to job loss, illness, credit issues, or simply falling behind financially. And the consequences can be more serious than most people realize.
But there’s good news: You have options—especially if you have equity in your home.
At TurnedAway.ca, we specialize in helping homeowners in financial distress, including those who are behind on their property taxes. In most cases, we can help you pay off your arrears quickly, avoid legal action from the city, and create a plan to recover financially. If you are behind on property taxes you need to address the issue before it’s too late.
In this article, we’ll explain:
- What happens when you fall behind on property taxes
- How to avoid collection actions or a tax sale
- How home equity loans can help—even with bad credit
- What steps to take now to protect your home and credit
What Happens When You’re Behind on Property Taxes in Ontario?
Every homeowner in Canada is required to pay annual property taxes to their local municipality. When you miss payments, interest and penalties accumulate monthly—often at rates as high as 1.25% per month.
But it doesn’t stop there. Here’s how the process typically escalates when you are behind on Property Taxes:
Stage 1: Interest and Penalty Charges
- When you are behind on taxes you start accruing daily interest
- Municipalities charge late fees monthly (up to 15% per year)
Stage 2: Letters, Notices, and Tax Arrears Certificates
- If taxes go unpaid for more than a year, the city may issue a Tax Arrears Certificate
- This is a formal warning that your home may be sold to collect the debt
Stage 3: Power of Sale or Tax Sale
- If no payment is made within one year of the Tax Arrears Certificate, the city has the legal right to sell your home through a tax sale
- You could lose your property, even if you’ve paid your mortgage on time. You are taking a massive risk when you are behind on property taxes in Ontario
Stage 4: Credit Damage and Legal Costs
- A lien for unpaid taxes can seriously damage your credit
- Collection or legal costs are added to your balance
- Your mortgage lender may demand payment or call in the loan
Common Reasons Homeowners Fall Behind
It’s more common than you think—and nothing to be ashamed of. We work with homeowners every day who’ve fallen behind due to:
- Job loss or income reduction
- Unexpected medical expenses
- High-interest debt overload
- Divorce or separation
- Missed mortgage renewals
- Confusion about escrow/tax account responsibilities
Why You Should Act Fast
Waiting too long can turn a manageable problem into a financial emergency. Here’s what’s at risk if you don’t address property tax arrears quickly:
- Loss of home through tax sale or power of sale
- Legal fees and municipal charges added to your balance
- Higher interest rates if you need emergency funding later
- Lender action (especially if taxes remain unpaid for over 1 year)
How TurnedAway.ca Helps Homeowners Pay Off Property Tax Arrears
We specialize in fast, equity-based solutions for homeowners facing urgent financial problems—including unpaid taxes.
Whether you need $5,000 or $150,000, we can help you secure a loan based on your home’s value—not your credit or income.
🔑 Our Most Common Solutions
- Home Equity Loans
Borrow against the equity in your home to pay off your tax arrears.
- 1-year term
- Interest-only payments
- Fast approval (24–48 hours)
- Bad credit OK
Learn more about Home Equity Loans
- Second Mortgages
Ideal if your first mortgage is in good standing and you want to keep it intact.
- Funds are used to pay the city directly
- Prevents tax sale and further legal action
- Lower monthly payments than unsecured debt
- Private First Mortgage Refinance
If you’re also behind on mortgage payments or have other debt, we may refinance your current mortgage to:
- Pay off arrears
- Clear CRA or credit card debt
- Consolidate into one manageable payment
Explore alternative mortgage solutions
Real Client Stories: Stopping Tax Sale in Its Tracks
Case Study 1: Facing a Tax Lien in Ottawa
Client: Denise, 61, retired and living on CPP/OAS
Problem: Owed $8,200 in unpaid taxes over two years; received a tax arrears certificate
Bank said: No, due to pension income and poor credit
Solution: TurnedAway.ca provided a $25,000 home equity loan
Result: Taxes paid in full, and extra funds used to update her roof and catch up on credit cards
Case Study 2: Power of Sale Avoided in Hamilton
Client: Marcus, 48, self-employed contractor
Problem: Owed $11,000 in taxes; city initiated power of sale proceedings
Solution: We arranged a second mortgage within 4 business days
Result: Tax account cleared, legal action stopped, and Marcus repaid the loan within 10 months
Case Study 3: Mortgage Lender Called in the Loan
Client: The Smith family, Sudbury
Problem: Behind on property taxes for 18 months; lender sent notice of default
Solution: TurnedAway.ca refinanced the mortgage with a private lender
Result: Paid off taxes, CRA debt, and avoided foreclosure
Frequently Asked Questions
- Can I get a loan if I have bad credit?
Yes. We focus on home equity, not just credit score. Many of our clients have scores under 600—or no active tradelines at all.
- What if I’m on disability or pension income?
That’s okay! We work with clients receiving:
- ODSP
- CPP/OAS
- WSIB
- Employment Insurance
As long as there’s equity in your home, we can usually help.
- How quickly can I get approved?
In urgent tax sale cases, we’ve approved and funded in as little as 48 hours. The sooner you apply, the more options we’ll have.
- Will this affect my current mortgage?
Not necessarily. If your mortgage is in good standing, we can often place a use a home equity loan when you are behind on your property taxes, so you don’t lose your existing rate or term.
- How much equity do I need?
Most lenders want to see that your total debt—including the new loan—will not exceed 75–80% of your home’s value.
Use our Home Equity Calculator to estimate your eligibility.
What Happens If You Do Nothing?
If you don’t address property tax arrears:
- The city may take legal action to sell your home
- Your mortgage lender may pay the taxes and add the amount to your loan
- You could be forced into a high-interest private loan or lose refinancing options altogether
Our 12-Month Property Tax Recovery Plan
At TurnedAway.ca, we don’t just provide emergency funding—we help you recover long term.
Step 1: Secure financing
We arrange a short-term home equity loan or second mortgage to pay off the arrears immediately. If you are behind on property taxes, it’s imperative that you act quickly.
Step 2: Rebuild
We help you manage payments, improve your credit, and stabilize your financial situation.
Step 3: Refinance
Once your credit or income improves, we refinance your short-term loan with a lower-rate mortgage from a bank, B lender, or credit union.
Final Thoughts: Being Behind on Your Property Taxes Doesn’t Have to Cost You Your Home
Falling behind on taxes is stressful—but losing your home doesn’t have to be the outcome. If your city is threatening legal action or you’ve already received a Tax Arrears Certificate, don’t wait. If you’re behind on property taxes, we can often secure financing in under 48 hours.
At TurnedAway.ca, we help homeowners solve problems fast—with the goal of getting you back on track within 12–18 months.
👉 Apply Now or Schedule a Free Consultation to get the help you need—before it’s too late.
