15 Investment Tips for Tax Delinquent Properties

Investors are often shocked by what they can find in tax sales across Canada. Municipalities collect Tax-delinquent properties annually and put them up for sale either by auction or tender. Their minimum bid is a fraction of their assessed value, and the final sales price is typically significantly less than the property’s actual value. 

While not every tax-sale home is a winner, there are ways to boost your portfolio and net extraordinary returns on real estate. Here are some investment tips for tax-delinquent properties.

Investigate the Bidding Process

Get to know the ins and outs of how to bid for tax sale homes. It may be a public auction or bid by public tender. Note the date and time for when bids are accepted. Read through the bidding rules and ensure you fulfill the full criteria.

Select the Right Market

As with any real estate, with tax delinquent properties, ensure you invest in a market where property values are stable and/or growing. No matter how you intend to profit from real estate, there must be interest from the general public and the potential to yield a return.

Obtain Similar Property Values

Look at related property values. Examine other properties on the same street and in the same neighbourhood. Consider the property values of similar houses in the region. See your tax-delinquent house’s unique selling points and consider its value next to comparable properties.

Be Mindful of Declining Population

If the tax sale home is in an area with a declining population, it may be best to avoid it, as it suggests a lack of resale or rental potential.

Signs of Rental Appeal

Investors often buy tax sale properties, fix them, and use them as rentals. If this is your strategy, assess rental appeal by looking at proximity to school work opportunities and amenities. See if public transport is accessible and judge how marketable the neighbourhood is.

Tax Delinquent Property Risks

Tax-sale homes are sold as-is. There could be hidden damages inside that you won’t see until after the property is yours. This is always a risk. As a bidder, you have no right to conduct a home inspection or to see the interior. This is the primary risk of bidding in a tax sale.

Conduct an External Inspection

You can visit a tax-delinquent property from a public area such as a road or public park. Inspect the outside for any signs of unpleasantness or damage. To get a better glimpse, some investors even use a drone to acquire an aerial perspective, which can be extremely helpful.

Run an Online Search

Use online tax sale listings to review the details of a tax-delinquent property. Search the property address in general search engines and on social media. You may even discover past property listings and other details that give insight into the home’s value.

Liens, Disputes, and a Title Search

Complete a title search on any tax sale home you are considering. A title search will tell you if there are any liens, encumbrances, or potential legal disputes to come around the home’s ownership. It is then your decision whether a property is worth bidding on.

Set Aside Repair and Renovation Costs

Rarely a tax-delinquent property does not need repairs and renovations. Estimating these costs without seeing the home first is impossible. However, set aside thousands of dollars to keep as contingency funds if immediate repairs are required.

Avoid Overpaying

Set a maximum bid amount for a tax sale home. This amount should be comfortable and not put undue financial stress on you or your portfolio. Avoid emotional bidding, and do not overbid above this number.

Budget Accurately

To touch upon a prior point, budget carefully when you invest in a tax-sale home. Account for not only the purchase price but also repair costs, holding costs and fees, and other potential expenses, such as the cost of a lawyer to assist with an eviction.

Connect with a Lawyer

If there is any hint of a legal issue surrounding the real estate you buy, investigate it with a lawyer. Contact a real estate lawyer, and do not try to go about handling legal challenges without the assistance of an expert.

Know the Redemption Period

Some jurisdictions selling tax-delinquent properties offer owners a redemption period wherein they can reclaim their property. Until this period is over, you cannot claim full property ownership. Delay further investing, such as repairs and renovations, until the redemption period ends.

Learn from Other Tax Sale Investors

Look online to social media communities and forums to learn from the experiences of other tax sale investors. By simply reading through different Q&As and posts, a real estate investor can pick up tips, strategies, and a wealth of knowledge.

Reviewed and edited by Albert Fang.

See a typo or want to suggest an edit/revision to the content? Use the comment form below for feedback.

At FangWallet, we value editorial integrity and open collaboration in curating quality content for readers to enjoy. Much appreciated for the assist.

---

Did you like our article and find it insightful? We encourage sharing the article link with family and friends to benefit as well - better yet, sharing on social media. Thank you for the support! 🍉

Article Title: 15 Investment Tips for Tax Delinquent Properties

https://fangwallet.com/2025/02/25/15-investment-tips-for-tax-delinquent-properties/

---

The FangWallet Promise

FangWallet is an editorially independent resource - founded on breaking down challenging financial concepts for anyone to understand since 2014. While we adhere to editorial integrity, note that this post may contain references to products from our partners.

The FangWallet promise is always to have your best interest in mind and be transparent and honest about the financial picture.

---

---

Become an Insider

Subscribe to get a free daily budget planner printable to help get your money on track!

Make passive money the right way. No spam.

First Name:
Email Address:

Leave this field empty if you're human: