By Tax Sale Compass Editorial Team, Cloudy Days Retail Inc.
Last reviewed: October 1, 2026
An Ontario municipal tax sale runs on two pieces of law. Part XI of the Municipal Act, 2001 ("Sale of Land for Tax Arrears", sections 370.2 to 389) sets the stages and the legal effects. Ontario Regulation 181/03, the Municipal Tax Sales Rules, sets the mechanics of advertising, tendering and bidding. The City of Toronto has its own Toronto Tax Sales Rules (Ontario Regulation 579/06) under the City of Toronto Act, 2006, which this guide does not cover.
We checked each point below against the official Ontario e-Laws text of both instruments. For how Ontario compares with other provinces, see Provincial Tax Sale Systems and Redemption Periods by Province.
When any part of the tax arrears is still owing on January 1 of the second year after the taxes became owing, the treasurer may prepare and register a tax arrears certificate against title, unless the municipality directs otherwise (section 373(1)). The certificate must say the land will be sold by public sale if the cancellation price is not paid within one year after registration (section 373(2)). Each certificate covers only one separately assessed parcel (section 373(4)).
There is a faster track for land that has gone to the Crown because a corporation was dissolved: under section 373.1 the warning period is 90 days instead of one year.
Within 60 days after registering the certificate, the treasurer must send notice of the registration to the assessed owner and to every person who appears on the parcel register (or abstract index) and the index of executions to have an interest in the land (section 374(1)). The owner's spouse must also get notice (section 374(2)). The treasurer then swears a statutory declaration listing who was notified, and anyone may inspect it (section 374(3) and (4)).
Before the one-year period ends, "any person" may have the certificate cancelled by paying the cancellation price as of the day payment is tendered (section 375(1)). The treasurer then registers a tax arrears cancellation certificate (section 375(2)). A mortgagee or other notified person (other than the owner or spouse) who pays gets a lien on the land for the amount paid, ranking ahead of the interests of the other notified persons (section 375(3) and (4)).
Whoever pays may ask, within 30 days, for an itemized breakdown of the cancellation price, and may apply to the Superior Court of Justice if the treasurer does not provide it or the costs look unreasonable (section 376(1) and (2)). This does not apply where council has fixed a scale of costs by by-law under section 385.
The municipality may also sign an extension agreement with the owner, a spouse, a mortgagee, a tenant in occupation or another person with an interest, but only before the one-year period expires (section 378(1)). The agreement cannot reduce the cancellation price or stop anyone from paying it at any time (section 378(2)). While it subsists, the clock in section 379 stops running (section 378(4)).
If the cancellation price is still unpaid 280 days after registration, the treasurer must, within the next 30 days, send a final notice that the land will be advertised unless the price is paid before the one-year period ends (section 379(1)). If the year ends with the price unpaid and no extension agreement in place, the land "shall be offered for public sale by public auction or public tender, as the treasurer shall decide" (section 379(2)). The statute leaves the choice of format to the treasurer.
The minimum bid or minimum tender is the cancellation price (section 379(2.1)). Council may exclude all mobile homes on the land from the sale by by-law, and the advertisement must then say so (section 379(3) and (4)).
For both formats, the treasurer advertises once in The Ontario Gazette and once a week for four weeks in a local newspaper, or, if there is no suitable newspaper, posts notices in the municipal office and one other prominent place (Ontario Regulation 181/03, sections 5(2) and 13(2)). The Gazette advertisement uses the prescribed form: Form 6 for a tender, Form 8 for an auction. Newspaper advertisements in weeks two to four may be shorter, provided a Form 6 or Form 8 copy is online for those weeks (sections 5(3) and 13(3)). The regulation requires at least seven days after the last advertisement before tenders close or the auction is held (sections 5(6) and 13(6)).
| Point | Public tender (regulation Part II) | Public auction (regulation Part III) |
|---|---|---|
| Minimum | Minimum tender amount = cancellation price (Act section 379(2.1)) | Minimum bid = cancellation price (Act section 379(2.1)) |
| How you bid | Form 7 tender in a sealed envelope marked as a tax sale, addressed to the treasurer, one parcel per tender (section 6) | Open bidding; the auctioneer states the minimum, repeats each bid and calls the last bid three times (section 15) |
| Deposit | At least 20 per cent of the tender amount, by money order, certified cheque or bank draft (section 6(1)(b)) | The regulation sets no separate deposit; the winning bidder must pay immediately (section 16) |
| Withdrawal | Written request received before 3 p.m. local time on the last day for tenders (section 8) | Not applicable |
| Opening and winner | Opened in public as soon as possible after 3 p.m.; non-compliant tenders rejected; all but the two highest returned (section 9) | Highest bidder who immediately pays the bid, applicable taxes such as land transfer tax, and accumulated taxes (section 16) |
| Time to pay | Highest tenderer has 14 days from the mailing of notice to pay the balance, applicable taxes and accumulated taxes (section 11) | Immediately, to the auctioneer (section 16) |
| If the winner does not pay | Deposit forfeited; land offered to the second tenderer (sections 11(3) and 12) | Bidding reopened once (section 17) |
"Accumulated taxes" are the real property taxes that build up from the first day of advertising until a successful purchaser is declared (regulation, section 1). "Cash" payments may be made by money order, bank draft or a cheque certified by a bank, trust corporation or credit union (section 25). If two tenders are equal, the one received earlier wins (section 7(2)).
If there is a successful purchaser, the treasurer registers a tax deed in the purchaser's name or as the purchaser directs (Act section 379(5)(a)). A registered tax deed vests the land in fee simple, free of all estates and interests except easements and restrictive covenants that run with the land, certain interests of the Crown in right of Canada or Ontario, and interests acquired by adverse possession by abutting landowners (section 379(7)). Where mining rights are taxable under the Mining Act, only the surface rights pass (section 384).
Three limits are worth knowing before you bid:
If there is no successful purchaser, the treasurer may register a notice of vesting that puts the land in the municipality's name (section 379(5)(b) and (7.1)). Alternatively, within two years of the failed sale the treasurer may offer it a second time, by auction or tender, after sending at least 30 days' notice of readvertisement (section 380.1). If no notice of vesting is registered within two years after a sale with no successful purchaser, the tax arrears certificate is deemed cancelled, though a new one may be registered (section 379(15) and (16)). During the 24 months after the failed sale, the municipality may enter the land for an environmental site assessment to decide whether to take it (section 386.1).
A treasurer who considers a sale impractical or unfair to bidders may also postpone it and readvertise; if the rescheduled sale is not held within 90 days of the original date, a cancellation certificate must be registered (regulation, section 22).
Proceeds go first to the cancellation price, then to everyone with an interest in the land according to their legal priority, and last to the former owner (section 380(1)). The treasurer pays the balance into the Superior Court of Justice and sends a statement to the people entitled within 60 days (section 380(2) and (3)). Claimants apply to the court no earlier than 90 days and no later than 10 years after the payment in (section 380(5)). If the surplus is $250 or less, it is forfeited to the municipality (section 380.0.1).
Invented for illustration. The municipality, parcel, people and amounts are not real.
The fictional Township of Maple Bend has a vacant lot with unpaid 2024 taxes still owing on January 1, 2026. The treasurer registers a tax arrears certificate on Monday, March 2, 2026, and sends notices to the owner, the owner's spouse and a mortgage lender by May 1, 2026. Nobody pays. On December 7, 2026, 280 days after registration, the final-notice clock starts, and the final notice goes out by January 6, 2027. The one-year period ends on March 2, 2027 with no payment and no extension agreement, and the treasurer chooses a public tender.
The cancellation price on the first day of advertising is $18,400, so that is the minimum tender. After the Gazette advertisement and four weekly newspaper advertisements, tenders close at least seven days after the last one. Four envelopes arrive:
B and C are the two highest remaining. The treasurer mails B a notice. B has 14 days to pay the $24,800 balance plus land transfer tax and the accumulated taxes since advertising began. B pays, is declared the successful purchaser and receives a registered tax deed. The vacant possession question is now B's problem, not the township's. The $12,600 left after the $18,400 cancellation price is paid into the Superior Court of Justice, where the lender and the former owner can claim it.
Had B failed to pay, B's $6,200 deposit would have been forfeited to the township and C would have been offered the same 14-day deal.
Tax Sale Compass, operated by Cloudy Days Retail Inc. of Cold Lake, Alberta, is an information service. This guide is general information, not legal advice. Tax Sale Compass is not the auctioneer or the treasurer and is not a party to any sale. Every sale must be verified with the municipality that published the notice, and you should get advice from an Ontario lawyer before you bid or tender.