checklist The 25-Step Due Diligence Checklist
Phase 1 Legal & Title Searches
Download and read the tender package from the municipality
Search the provincial land registry for the full title abstract
Search specifically for Crown interest instruments (CRA, Attorney General)
Search the Personal Property Security Registry (PPSR) for the owner's name
Check the provincial environmental site registry
Verify zoning and check for municipal work orders/building orders
Check for heritage designations (Ontario Heritage Act or equivalent)
Consult a real estate lawyer for formal title opinion (recommended for all bids)
Phase 2 Physical & Environmental Inspection
Drive by the property (from public road only — do not trespass)
Review satellite/aerial imagery and municipal GIS mapping
Check for flood plain, Conservation Authority, or shoreline restrictions
Verify legal road access (some rural properties are landlocked)
Check utility availability: hydro, gas, water, sewer, telecom
Note visible environmental concerns: underground tanks, industrial waste, contamination
Assess condition of structures from road (occupied? demolished? habitable?)
Phase 3 Financial Analysis & Bid Preparation
Look up the government assessed value (MPAC, PVSC, BC Assessment, etc.)
Research recent comparable sales (comps) in the municipality
Estimate renovation / carrying costs realistically
Calculate your maximum bid: ARV – reno – legal – transfer tax – target profit
Understand the province's redemption period — plan your holding timeline
Confirm financing plan — note tax sales are cash purchases until redemption period expires
Calculate land transfer tax (Ontario has dual provincial + Toronto LTT; BC has PTT)
Prepare deposit: certified cheque/bank draft (typically 20% of bid)
Prepare sealed tender exactly per tender package instructions
Submit tender before deadline — late tenders are never accepted
gavel Why Crown Interests Are the #1 Risk
In Canadian tax sale law, a tax deed extinguishes most private encumbrances — mortgages, judgment liens, construction liens, and most utility arrears are cleared. However, debts owed to the Crown (federal or provincial government) enjoy priority protection and ARE NOT cleared by the tax sale.
Liens That SURVIVE a Tax Sale
- closeCRA Income Tax Lien (Income Tax Act s.223)
- closeGST/HST Deemed Trust (Excise Tax Act s.222) — super-priority
- closeEnvironmental Remediation Orders (CEPA and provincial equivalents)
- closeUtility Easements (hydro, gas, telecom right-of-way)
- closeHeritage Designations
Liens That ARE Cleared by Tax Sale
- checkPrivate mortgages
- checkJudgment liens
- checkConstruction liens
- checkMost municipal utility arrears
Read our full guide on Crown Interests & CRA Liens for detailed search instructions, provincial registry links, and risk assessment framework.
help Foire aux questions
At minimum: (1) search the land registry for Crown interests (CRA liens survive the sale), (2) search the PPSR for the owner, (3) check the environmental site registry, (4) verify zoning and municipal work orders, (5) drive by the property from a public road, and (6) research comparable sales. For any serious bid, hire a real estate lawyer for a title opinion ($300–$600).
Budget 2–5 business days. Land registry searches take 1–2 hours online (self-serve). Environmental and PPSR searches take under an hour. Physical inspection and comparable research take 2–3 hours. Most municipalities give buyers 4–8 weeks between listing and tender deadline — sufficient time for thorough due diligence.
The single biggest risk is inheriting Crown interests — especially CRA income tax liens (Income Tax Act s.223) and GST/HST deemed trusts (Excise Tax Act s.222) — that survive the tax sale. Unlike private mortgages and judgment liens, Crown interests transfer to the new owner. Always search the land registry specifically for government-registered instruments before bidding.
Self-serve due diligence costs $50–$150: land registry search ($15–$50), PPSR search ($8–$20), environmental registry search (free in most provinces). A lawyer-conducted title search with written opinion costs $300–$600. This is a non-negotiable investment before bidding on any property.
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