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 and 2026 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, 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). Unlike arrears, a 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 [email protected].
- 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).
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 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).
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). 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.
- 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 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, a HELOC or selling.
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