Failing to pay your municipal taxes, also known as property taxes, can quickly lead to serious consequences for property owners. In Quebec, as in the rest of Canada, property taxes are mandatory, and non-payment triggers a strict legal process that can ultimately result in the sale of the property. Fortunately, there are ways to avoid this outcome, especially when the situation is addressed promptly.
What are municipal property taxes and why do you have to pay them?
Municipal taxes, or property taxes, are levies collected by municipalities from property owners. They are used to fund essential services such as road maintenance, public safety, infrastructure, public transit and other municipal services.
Every property owner is legally required to pay these taxes according to the established deadlines. Failure to do so constitutes a default of payment, which opens the door to collection measures provided for by law.
Late payment: what happens after the first missed deadline?
As soon as a payment deadline is missed, municipalities generally apply interest and penalties to the outstanding balance. A notice of non-payment may be sent to inform the property owner of the unpaid amount and any additional charges.
In the case of late property tax payments, the situation is still reversible at first. However, the key takeaway is that ignoring municipal notices can quickly worsen the situation, leading to higher amounts owed and faster enforcement actions.
Timeline examples: how long can you remain in default?
Timelines vary by municipality, but in Quebec, property taxes can remain unpaid for several months before the sale process is initiated. However, once certain thresholds are reached, the municipality may begin formal collection proceedings.
Prolonged non-payment: steps leading to a tax sale
When property taxes remain unpaid for an extended period, the municipality may record the debt and issue a public notice. A notice of sale for non-payment of property taxes may then be issued to formally notify the property owner of the next steps.
This process is strictly governed by the Municipal Code of Quebec. Ultimately, the property may be placed on a list of properties for sale as part of a sale for non-payment of property taxes, allowing the municipality to recover the amounts owed.
Can you lose your home for not paying property taxes?
Yes. This is one of the most serious consequences and one of the most frequently asked questions. If property taxes remain unpaid despite notices and grace periods, the municipality may proceed with the sale of the property, often through a public auction. The proceeds of the sale are first used to cover the unpaid taxes and related fees.
What options are available to avoid losing your property?
Before a property is put up for sale, several solutions can be considered. The goal is always to settle the tax debt as quickly as possible in order to stop the process.
Reaching an agreement with the municipality
In some cases, a payment agreement can be negotiated with the municipality. This may take the form of a repayment plan, an extended deadline, or a temporary suspension of collection actions, depending on the property owner’s financial situation.
Financial assistance for property taxes: what resources are available?
Some municipalities or provincial programs offer property tax payment assistance, particularly for seniors or low-income households. Community organizations may also help guide property owners toward appropriate resources to support them in meeting their tax obligations.
Using a private mortgage loan in urgent situations
When traditional solutions are insufficient or time is critical, a private mortgage loan can allow property owners to quickly pay outstanding property taxes and avoid the sale of their property. This type of financing provides fast access to funds, even for clients with difficult credit situations.
Legal hypothec related to unpaid property taxes
Failure to pay municipal taxes may also result in the registration of a legal hypothec on the property. This registration protects the municipality by granting it a legal right over the property until the debt is fully repaid.
A taxpayer in default on their tax obligations, for example in the event of non-payment of property taxes, may have a legal hypothec registered against their property.
Prevention is always better than intervention
Non-payment of property taxes should never be taken lightly. Interest, penalties, legal hypothecs and even loss of the property are very real risks. The key is to act quickly when the first notices are received and not wait until the situation becomes irreversible.
Whether through an agreement with the municipality, financial assistance, or refinancing through a private mortgage loan, solutions do exist. Prevention is always better than intervention, to protect what matters most: your property.
About the author
Co-President
Formerly a mortgage broker, Mr. McKinnon has been active in the mortgage lending industry for over 15 years. His strength lies in his ability to thoroughly assess client needs and provide tailored advice that delivers the most advantageous solution—short, medium, and long term. With extensive experience in private lending and over $500 million in notarized residential private mortgages, he stands out as Co-President of Lauréat Finance. His priority: delivering the best possible solutions efficiently and without delay.
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