# Tax Sales



## Sasquatch (Jan 28, 2012)

I've started to wind down our RRSPs (deadline is 2016 for my wife and 2018 for myself) and I've been converting some to Mawer's Tax effective balanced fund, starting last year.
I've been playing with the idea of buying some properties via Tax Sale Auctions to further deplete our RRSPs. There seem to be some good deals to be had around here ie. 4 acres of land in a subdivision not far from the ocean for a bit less than $ 4000.- and only about a 1 hours drive from home.
I realize that auctions are unpredictable but I would simply have a predetermined amount I would be willing to spend and that'll be it.
Who knows, nobody else might be interested anyhow. 
There's a whole bunch of properties for sale, I'm only interested in land. 
I don't want to have to worry about a falling down building or anything like that.
I would of course do some research on the pieces I'm interested in to find out some background information and I definitely would do a physical inspection of said properties and try to talk to the neighbours as well.
Has anybody here ever bought some properties via a Tax auction and if so, I would love to hear their experiences :biggrin:


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## Rusty O'Toole (Feb 1, 2012)

Have made offers on a few but not bought any. Here in Ontario the tax sales are published in the Ontario Gazette which you can access online for free. If you see one you like, you send a bid to the local municipality accompanied by a deposit check. The sale is by sealed bid. They probably do something similar in Nova Scotia.


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## gt_23 (Jan 18, 2014)

Sasquatch said:


> I've started to wind down our RRSPs (deadline is 2016 for my wife and 2018 for myself) and I've been converting some to Mawer's Tax effective balanced fund, starting last year.
> I've been playing with the idea of buying some properties via Tax Sale Auctions to further deplete our RRSPs. There seem to be some good deals to be had around here ie. 4 acres of land in a subdivision not far from the ocean for a bit less than $ 4000.- and only about a 1 hours drive from home.
> I realize that auctions are unpredictable but I would simply have a predetermined amount I would be willing to spend and that'll be it.
> Who knows, nobody else might be interested anyhow.
> ...


My experience in tax sales is largely confined to Ontario and a couple U.S. states. Like many good investment schemes, I think the opportunity has diminished significantly as the scheme has become more widely known. I have been collecting data for some the major sales in Ontario for the last few years, and it seems that most properties go for at least 50-60% of assessed value, sometimes up to 75-80%, nowhere close to the starting bids. In my view, that does not leave enough upside considering the risk of dealing with evictions and possible damage to the property. I think a lot of this also has to do with the tender process; live auctions could be interesting if you can find one.

Another consideration is that tax sales in demand areas and urban centers are rare, as most homeowners in these areas would probably have other options like selling the property, refinancing, 2nd mortgages, etc. to take care of these debts. So most of the opportunities come up in second- and third-rate manufacturing/blue collar towns with low demand, which calls into question the assessed value above.

The successful bidders often times are local players with a good sense of the local RE market, such as developers, construction/trades people, real estate agents, etc. who are more willing to bid higher due to their local market knowledge.

I have bid on several of these and only won two over the course of 6-7 years. The time and costs required can be significant: research, title search, funding your deposit, legal costs. I don't think the profits I have made on two deals even come close to compensating for the time, effort, and cost, however, I find the process interesting and the prospect of finding that needle in a haystack somewhat exciting.


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## Sasquatch (Jan 28, 2012)

The tax auctions in NS are all live with real auctioneers, I wish I could bid on line but we're not that progressive around here :frown:
Should be interesting though, I think I'll go to the next one just to get a feel of what's going on. 
It's already marked in my calendar.
Advice taken on tax sales of properties with buildings on them, having been subject to abuse and vandalism.
That's why I'm only strictly looking for land.
I'm a sucker for bargains and have lots of time so I think I'll go and see what's going on, you just never know:biggrin:


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