# Property tax arrears in Toronto: what happens | TorontoReverseMortgage.ca

> Property tax arrears in Toronto: the 1.25% monthly charge, Final Notice, bailiff and tax sale timeline, and your options. Free estimate, no sales pressure.

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# Property tax arrears in Toronto: what happens if you fall behind?

Toronto's collection steps for unpaid property tax, what each step adds to the bill, and the ways to clear the balance long before a tax sale becomes possible.

Updated October 28, 2026 · 6 minute read · Published by Dominion Lending Centres Homestead Financial

The short answer

Falling behind on property taxes in Toronto starts a slow process with written notices along the way: a late payment charge of 1.25% a month, a Final Notice, then a bailiff. Property tax arrears in Toronto lead to a tax sale only after at least two years, plus one more year after a certificate is registered on title.

[See what your own Toronto home could provide](/estimate/): a free estimate, no sales pressure.

On this page

1.  [What happens if you stop paying property taxes in Toronto?](#what-happens-if-you-stop-paying-property-taxes-in-toronto)
2.  [What is the penalty for overdue property taxes in Toronto?](#what-is-the-penalty-for-overdue-property-taxes-in-toronto)
3.  [Who do you contact about overdue property taxes in Toronto?](#who-do-you-contact-about-overdue-property-taxes-in-toronto)
4.  [Can a reverse mortgage pay off property tax arrears?](#can-a-reverse-mortgage-pay-off-property-tax-arrears)
5.  [What other ways are there to clear property tax arrears?](#what-other-ways-are-there-to-clear-property-tax-arrears)

[TorontoReverseMortgage.ca](/) explains property tax arrears in Toronto for homeowners 55 and older: what the City does when a bill goes unpaid, what each step costs, and how to clear the balance.

People who fall behind want to know first whether the house is at risk. The challenge is not usually the missed bill itself. It is the late payment charge of 1.25% a month, which the City cannot waive, and the way arrears rule out the City’s tax relief programs for seniors.

This page walks through the City’s steps, then the ways to clear the balance.

## What happens if you stop paying property taxes in Toronto?

The City adds a late payment charge of 1.25% a month, mails overdue statements and sends a Final Notice the next April. In May, a collection company called a bailiff takes over if $100 or more is still owing. A tax sale comes last, only after taxes have been in arrears for at least two years.

Each step adds to the bill ([City of Toronto late payments](https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/late-tax-bill-payments/) and [2026 fees](https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-rates-and-fees/)):

| When | What happens | Added to the bill |
| --- | --- | --- |
| Each missed due date | Late payment charge | 1.25% a month |
| Before the March to September due dates | Overdue statement | $23.71 each |
| The next April | Final Notice, 21 days to pay | $47.74 |
| Early May | A bailiff takes over, if $100 or more is owing | $82.69 |
| January 1, two years after the tax year | Tax arrears certificate may be registered | $1,418.25 plus costs |

### How long can property taxes go unpaid in Toronto?

Under section 344 of the [City of Toronto Act, 2006](https://www.ontario.ca/laws/statute/06c11), the City may register a tax arrears certificate (a legal notice on the home’s title) once some of a year’s taxes are still owing on January 1 of the second year after they were due.

The home can then be sold by public sale if the full amount isn’t paid within a year of registration. For 2026 taxes, the earliest certificate date is January 1, 2028, so a sale could not happen before 2029.

## What is the penalty for overdue property taxes in Toronto?

The penalty is a late payment charge of 1.25% of the overdue tax, added on the first day it is late and on the first day of every month after. The charge works out to 15% a year. The City says these charges “cannot be waived or altered.”

Every $1,000 of overdue tax adds $12.50 a month, or $150 over a year, before fees. Any payment goes to the oldest amount owing first.

Arrears also rule out the City’s relief programs for low-income seniors, whose 2026 rules require that no property taxes are owing from prior years ([City of Toronto relief program](https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-water-solid-waste-relief-and-rebate-programs/property-tax-and-utility-relief-program/)). Unlike arrears, a [Toronto property tax deferral](/guide/toronto-property-tax-deferral/) is agreed with the City in advance.

## Who do you contact about overdue property taxes in Toronto?

Contact the City as early as you can. The City’s late payments page sends questions about a tax balance to 311 Toronto’s Tax & Utility Line, Monday to Friday, 8:30 a.m. to 4:30 p.m. Later in the process, the contact changes:

-   **Once a bailiff has the account:** payment arrangements are made with the bailiff company directly.
-   **At the tax sale stage:** the City asks owners whose accounts are in “pre-registration or registration status” to email [revcoll@toronto.ca](mailto:revcoll@toronto.ca).
-   **After a certificate is registered:** the City may make an extension agreement with the owner, a spouse, a mortgage lender or a tenant, giving more time to pay but never reducing the amount ([City of Toronto Act, section 349](https://www.ontario.ca/laws/statute/06c11)).

## Can a reverse mortgage pay off property tax arrears?

Yes. Property tax arrears are paid from the reverse mortgage money at closing, and the rest lands in the bank account to use as you please. After that, there are no required monthly mortgage payments. Property taxes, home insurance and upkeep stay yours, and keeping the taxes paid is one of the mortgage’s conditions.

Every owner on title must be 55 or older, and the home must be where you live. Lenders check income only far enough to confirm the property taxes are comfortably affordable.

A [reverse mortgage used to clear debts](/reverse-mortgage-debt-consolidation-toronto/) pays everything registered against the home first: tax arrears, an old mortgage or home equity line of credit, liens (legal claims on the title) and collections. Those debts come out of the amount you borrow, not on top of it. One-time costs are about $2,000 to $3,500 ([what a reverse mortgage costs in Toronto](/guide/reverse-mortgage-cost-toronto/)).

### An example on a $908,200 Toronto home

For example, an illustrative widow of 80 owns a Toronto home worth $908,200, Toronto’s typical-home benchmark price in September 2026 ([TRREB Market Watch](https://trreb.ca/wp-content/files/market-stats/market-watch/mw2609.pdf)). She owes $9,000 in property tax, and late payment charges add $112.50 a month on that $9,000. She also owes $12,000 on a line of credit.

At 80, the most she could borrow is up to about 60% of the home’s value, about $545,000 on $908,200. She takes $45,000. At closing, the $9,000 of tax, the late charges added by then and the $12,000 line of credit are paid first from the $45,000.

The remaining $24,000, less those late charges and any closing costs, lands in her bank account to use as she pleases. She has no required monthly mortgage payments, but her taxes, insurance and upkeep stay hers.

### When it fits, and when it doesn’t

A reverse mortgage can fit when:

-   Every owner is 55 or older and wants to stay.
-   The arrears are part of a larger shortfall, such as a mortgage payment or card debt.

It may not fit when:

-   Savings or family help can clear a small shortfall.
-   A sale is likely within a few years, while early repayment charges apply.
-   Future tax bills would still be unaffordable.

## What other ways are there to clear property tax arrears?

Savings or family help, a HELOC (home equity line of credit) and selling are the other routes. Richard Hopkins, Mortgage Broker, arranges HELOCs as well as reverse mortgages, so his recommendation is the one with the best overall value for you, even if that is not a reverse mortgage.

-   **A HELOC** has monthly payments that rise with the prime rate, and it needs enough income to pass the bank’s stress test (a qualifying test at a higher rate). See [alternatives to a reverse mortgage in Toronto](/guide/alternatives-to-reverse-mortgage-toronto/).
-   **Selling** pays the arrears from the sale money when it closes. Buying again in Toronto adds both the Ontario and the Toronto land transfer tax, as [the cost of downsizing in Toronto](/guide/downsizing-in-toronto-cost/) shows.

## The bottom line

Toronto's tax arrears process is slow and comes with written notices, but the 1.25% monthly charge can't be waived, so every month of waiting adds to the bill. Contact the City early, then compare the ways to clear the balance: savings or family help, a [reverse mortgage that pays off debts](/reverse-mortgage-debt-consolidation-toronto/), a HELOC or selling.

[Get a free estimate for your Toronto home](/estimate/). It's free, and there's no sales pressure.

## Questions people also ask

**Can the City of Toronto waive late payment charges on property tax?**

No. The City's late tax bill payments page says penalty and interest charges on overdue amounts cannot be waived or altered. The charge is 1.25% on the first day of default and on the first day of each month after, which is about $150 a year for every $1,000 owing.

**Can you get a reverse mortgage if you owe property taxes in Toronto?**

Yes, if the other requirements are met. Owing property tax doesn't rule out a reverse mortgage: the arrears are paid from the mortgage money at closing, along with anything else registered against the home. After closing, keeping property taxes paid is one of the mortgage's conditions, together with home insurance and upkeep.

**Do property tax arrears affect Toronto's tax relief programs for seniors?**

Yes. Toronto's relief programs for low-income seniors, which cancel or defer the year's tax increase, require that no property taxes are owing from prior years. The arrears have to be cleared first. Read [how Toronto's property tax deferral works](/guide/toronto-property-tax-deferral/).

[

Related service

Clearing debts

A reverse mortgage can clear cards, lines of credit and property tax arrears, with no required monthly mortgage payments afterward.

Read more →

](/reverse-mortgage-debt-consolidation-toronto/)

## More guides for Toronto homeowners

-   [How does Toronto's property tax deferral for seniors work?](/guide/toronto-property-tax-deferral/)
-   [What are the alternatives to a reverse mortgage in Toronto?](/guide/alternatives-to-reverse-mortgage-toronto/)
-   [How much does a reverse mortgage cost in Toronto?](/guide/reverse-mortgage-cost-toronto/)
-   [How much can a 70-year-old borrow with a reverse mortgage in Toronto?](/guide/how-much-can-a-70-year-old-borrow-toronto/)

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## Sources

Figures checked October 28, 2026.

1.  [City of Toronto: Late Tax Bill Payments (modified December 11, 2025)](https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/late-tax-bill-payments/)
2.  [City of Toronto: Property Tax Rates and Fees, fees effective January 1, 2026 (modified May 11, 2026)](https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-rates-and-fees/)
3.  [City of Toronto Act, 2006, sections 344 and 349 (Ontario e-Laws)](https://www.ontario.ca/laws/statute/06c11)
4.  [City of Toronto: Property Tax, Water and Solid Waste Relief Program, 2026 rules](https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-water-solid-waste-relief-and-rebate-programs/property-tax-and-utility-relief-program/)
5.  [Toronto Regional Real Estate Board (TRREB) Market Watch, September 2026](https://trreb.ca/wp-content/files/market-stats/market-watch/mw2609.pdf)
6.  [City of Toronto: Municipal Land Transfer Tax rates and fees (modified April 7, 2026)](https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/municipal-land-transfer-tax-mltt-rates-and-fees/)

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