2.4 Million Outstanding Midland Taxes For 2021

In a report coming to Council this Wednesday, we learn that the amount of unpaid Municipal taxes (includes County and Education) decreased by 1% in 2021. Some of you have asked me about the recent “tax sales”.

There was a 1.00% decrease in the level of 2021 year-end tax arrears. The total outstanding represents 6.50% of total taxes billed. Total outstanding taxes of $2,364,657 ($2,663,261 in 2020) includes not only the Town’s portion, but also the amount owing to the County, School Boards as well as accumulated penalty and interest. A level below 10% is considered a low risk.

Outstanding property taxes are secured and fully collectible by the Town, except in
cases where taxes owing exceed the actual market value of a property, or liens in
favour of the Crown that have formed a priority. Active collection efforts on outstanding
property taxes include regular mailing of reminder notices following each tax due date.
Taxpayers are also encouraged to consider the pre-authorized payment plan offered by
the Town.

Once a property falls into three years of tax arrears, it is eligible for registration of Tax
Arrears Certificate. This starts the process whereby the property owner is notified that
they have one year to remit all taxes, interest, and penalties plus registration costs in
full. The payment must be made in one lump sum (unless an extension agreement has
been negotiated with the Treasurer) to have the Tax Arrears Certificate removed from
title and to avoid the eventual Tax Sale of the property. Registration for Arrears
Certification, when warranted, will occur annually in the spring.

Unpaid taxes become a priority lien on the property, except in favour of the Crown.
Several properties become eligible for registration of Tax Arrears Certificate every year.
Historically once preliminary notices are mailed, property owners will contact the
municipality to work out a payment plan to clear their arrears; the remainder are
registered and are cleared prior to the expiry of the one-year period. Very few properties
default to the point of Tax Sale. In 2020, there were 47 properties eligible, only 4
properties ended up in Tax Sale. Currently staff are working to resolve tax arrears on 31
eligible properties.

Collection risk are borne by the local municipality, amounts collected on behalf of the
County and School Board are remitted as if they have been fully collected within the
year they were billed. It is good practice to keep tax arrears at a manageable level as
not to cause cash flow problems for the municipality.

Source: https://midland.civicweb.net/document/34992