Complete breakdown of all costs involved in tax sale purchases including hidden fees and ongoing expenses.
Understanding the upfront costs is crucial for successful tax sale investing. These are the immediate expenses you'll face when purchasing a property.
What it includes:
This is typically the starting point for bidding and represents the municipality's cost recovery.
Typical ranges:
Deposits secure your bid and must be paid immediately upon winning.
The minimum bid is often much lower than market value, but don't assume that's what you'll pay. Popular properties can sell for significantly more than the minimum due to competitive bidding.
Beyond the purchase price, various administrative and legal fees add to your total cost.
| Fee Type | Typical Range | When Paid | Notes |
|---|---|---|---|
| Registration Fee | $50 - $200 | Before auction | Required to participate in bidding |
| Administrative Fee | $200 - $500 | At closing | Municipal processing costs |
| Legal Fees | $800 - $2,000 | At closing | Title transfer and legal work |
| Title Insurance | $300 - $800 | At closing | Protects against title defects |
| Survey Costs | $800 - $1,500 | Before closing | May be required by lender |
Fees vary significantly by province and municipality. Always check local requirements before bidding. Some jurisdictions have additional fees not listed here.
Once you've won the auction, additional costs arise during the closing and title transfer process.
Provincial rates vary:
Some municipalities add additional land transfer taxes.
Registration costs:
Fees for officially registering your ownership.
If you're using financing (less common for tax sales), additional costs include:
Tax sale properties often come with immediate ongoing expenses that previous owners neglected.
Successful tax sale investing requires careful financial planning and realistic cost expectations.
Budget: Purchase price + 5-10%
Budget: 10-20% of property value
Here are realistic cost breakdowns for different property types and scenarios.
Property: Single-family home, $150,000 market value
| Purchase price | $35,000 |
| Land transfer tax (1.5%) | $525 |
| Legal fees | $1,200 |
| Registration fees | $300 |
| Total Acquisition | $37,025 |
| First year taxes | $2,800 |
| Insurance | $1,200 |
| Essential repairs | $8,000 |
| Total First Year | $49,025 |
Property: Residential building lot, $80,000 market value
| Purchase price | $12,000 |
| Land transfer tax | $0 |
| Legal fees | $800 |
| Registration fees | $200 |
| Total Acquisition | $13,000 |
| First year taxes | $1,200 |
| Survey costs | $1,000 |
| Site cleanup | $2,000 |
| Total First Year | $17,200 |
Example 1: Total investment $49,025, property value $150,000 = Potential profit $100,975 (206% return)
Example 2: Total investment $17,200, property value $80,000 = Potential profit $62,800 (365% return)