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Tax Sales in
Newfoundland and Labrador

Everything you need to know about investing in tax-delinquent real estate in Newfoundland and Labrador. From understanding the legal process to finding your first property.

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info Understanding Tax Sales in Newfoundland and Labrador

Investing in tax sale properties in Newfoundland and Labrador offers a unique opportunity to acquire real estate at potentially significant discounts. When property owners fail to pay their property taxes for an extended period, municipalities have the legal authority to sell these properties to recover the unpaid taxes and associated costs.

Tax sales in Newfoundland and Labrador are governed by provincial legislation that establishes rules for how municipalities can recover unpaid property taxes through the sale of the property.

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Why Properties Go to Tax Sale

Properties end up in tax sales for various reasons: owner passed away without a will, property was abandoned, owner is in financial distress, or simply neglect. This creates opportunities for investors to acquire properties that might otherwise not be on the market.

route The Tax Sale Process

In Newfoundland and Labrador, the tax sale process follows a structured legal procedure designed to protect both the property owner's rights and enable municipalities to recover unpaid taxes:

1

Tax Arrears Registration

When property taxes remain unpaid for a specified period (typically 2-3 years), the municipality registers a tax arrears certificate against the property's title. This serves as legal notice that the property may be sold.

2

Redemption Period

The property owner is given a redemption period (often 1 year in Newfoundland and Labrador) to pay all outstanding taxes, interest, penalties, and administrative costs. During this time, the owner can reclaim full ownership by settling the debt.

3

Public Advertisement

If not redeemed, the property is publicly advertised for sale. Advertisements typically appear in local newspapers, municipal websites, and platforms like Property Listings. This notice period is required by law to inform potential bidders.

4

Sale Event

The sale method varies by municipality—some use public tenders (sealed bids), while others conduct live auctions. Check with the specific municipality for their preferred method.

5

Transfer of Title

The successful bidder receives a tax deed, which typically provides clear title to the property. This means most liens and mortgages are extinguished. However, some encumbrances (like federal tax liens or easements) may survive.

gavel How to Bid on Tax Sale Properties

  1. 1

    Find Active Listings

    Browse our marketplace to find tax sale properties in Newfoundland and Labrador. We aggregate listings from municipalities across the province.

  2. 2

    Conduct Due Diligence

    Research the property thoroughly. Order a title search, check zoning, review the property assessment, and if possible, visit the location (exterior only, as interior access is rarely granted).

  3. 3

    Obtain the Tender Package

    Contact the municipality or download the official tender package. This contains the tender form, property details, terms and conditions, and deposit requirements.

  4. 4

    Prepare Your Bid

    Complete the tender form carefully. Include a certified cheque or bank draft for the deposit (typically 20% of your bid amount). Ensure all documents are signed and notarized if required.

  5. 5

    Submit Before Deadline

    Submit your sealed bid to the municipality before the deadline. Late bids are typically rejected. Check if in-person delivery, courier, or mail is required.

  6. 6

    Close the Transaction

    If you win, you typically have 14 days to pay the balance. The municipality will issue a tax deed, which you should register with the land registry. Consider using a real estate lawyer for this process.

warning Risks and Considerations

Tax sale investing carries significant risks. Properties are sold 'as-is' with no warranties. Always consult with a real estate lawyer and conduct thorough due diligence before bidding.

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No Interior Access

You typically cannot inspect the inside of a property before bidding. There could be significant damage, mold, structural issues, or the property may even be occupied.

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Environmental Liability

As the new owner, you become responsible for any environmental contamination. This is especially risky for former industrial or gas station properties.

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Redemption Rights

In some cases, the previous owner or lienholders may have rights to challenge the sale or redeem the property even after the sale. Check the specific rules for Newfoundland and Labrador.

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Hidden Costs

Beyond the purchase price, budget for legal fees, title insurance, back utility bills, property repairs, and potentially eviction costs if the property is occupied.

help Frequently Asked Questions

While not legally required, it is highly recommended to work with a real estate lawyer experienced in tax sales. They can help with title searches, review tender documents, ensure proper completion of forms, and handle the closing process. The cost is minimal compared to the potential risks.
Traditional mortgages are very difficult to obtain for tax sales due to the short closing timelines (often 14 days) and the 'as-is' condition of properties. Most investors use cash, home equity lines of credit (HELOCs), or private lenders. Some investors also use funds from their RRSP through the First-Time Home Buyer's Plan if applicable.
The minimum tender amount is typically the total of all unpaid taxes, interest, penalties, and administrative costs. This is called the cancellation price or reserve price. Your bid must meet or exceed this amount to be valid. The amount is specified in the tender package.
If a property sells for more than the amount owed, the surplus is typically paid into court. The previous owner, lienholders, and other interested parties can apply to claim these funds. As a bidder, you are not responsible for the surplus—it does not affect your ownership.

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