When the Canada Revenue Agency (CRA) registers a lien against your home, they are securing their interest by attaching the repayment of their debt to your property.
The CRA considers a lien to be enforcement action and this tool is commonly applied where there are properties in the name of a taxpayer who has a tax debt. Collection officers at the CRA should be registering liens, or securing the Crown’s interest, much more frequently then they currently are, and it should be done whenever there is a tax debt of a considerable amount owing.
Below are some answers to common questions about CRA property liens to help you understand what to do, and where to turn for help.
1. How to tell if there is a lien registered against your property
A title search on your property will reveal the existence of a lien.
It is CRA policy that they advise you by letter when a Certificate has been registered in Federal Court which identifies the property in question and the balance owing for which they are preparing to register a lien. This does not mean that a lien has been registered, but this is essentially a warning of impending action.
If, however, the CRA does not have your correct address you will not receive any notices and thus may only discover there’s a lien when you try to sell or refinance your property. A title search reveals the existence of liens.
2. When the CRA registers a Certificate do they always then register a lien?
Not necessarily. The CRA could be using the Certificate in several ways, including; to secure their interest in the property to make sure that before the tax debtors interest in the property is liquidated, the tax debt is paid in full, or in order to get the attention of the property owner so they will begin negotiations with the CRA, or they may have the intention of proceeding with the seizure and sale of the property in order to pay off all or part of a tax liability.
3. Will the CRA take my house and leave me homeless?
It is CRA policy to not seize and sell a property when it would result in the property owner having nowhere to live. If this property is an income property or cottage or secondary place to live, then the CRA will likely proceed to realize on the property and pay off their debts.
4. Have I lost title to my home?
No. A lien is a registration on the title of that property which prevents you from selling or refinancing that property until either the tax debt owing is paid in full, or there is a written arrangement to have the proceeds from a sale or refinancing directed to the CRA for full payment of the debt.
5. What is a Writ of Fi Fa / Writ of Seizure and Sale?
If a Certificate has been registered in the Federal Court and the tax balance still exists, the Canada Revenue Agency (CRA) will register a Writ of Fi Fa (abbreviation of “fieri facias” which is Latin and means “that you cause to be made”). It is a writ of execution obtained in legal action which is addressed to the sheriff and commands him to, in this case, seize and sell, the property of the person against whom the judgement has been obtained.
This is a very serious enforcement action and after your property is sold, you are entitled to any proceeds left over after the tax arrears have been paid in full.
6. What are my options now that a Certificate has been registered and a lien applied to the property?
Even though the CRA has an interest in the property, you can still access the equity and use that equity to make arrangements with the CRA – or the Department of Justice – to refinance the property or even sell it with the understanding that this can only be done in conjunction with the CRA receiving full payment of their tax debt.
7. What is the CRA’s priority regarding my property should I decide to sell it?
Assuming your mortgage is a traditional mortgage through a recognized financial institution, the proceeds from a sale should fall in this order (depending on the type of tax(es) owing);
1. Financial institution holding the mortgage
2. Secured lenders
3. Canada Revenue Agency
4. Other creditors who have registrations against the property
5. Property owner.
So if you have other debts including a tax liability (and the two tend to go hand-in-hand), then it is possible in this scenario to have nothing left over by the time the property is sold and all debtors are paid off.
8. What if I owe CRA more than there they get from the sale of my property?
If, after the sale of your property there are still taxes owing to the CRA, them your tax balance is reduced by the amount the CRA is paid and the remainder is still owing to the CRA.
9. What if I am not the only one on title – ie/ jointly with a spouse?
In the case where there are more than one person on title in addition to you, it’s important to keep in mind that the CRA can only realize proceeds from your share of the equity in the property. So if you sell, re-finance or are forced to sell, only your share of the equity can be paid out the CRA. The CRA cannot seize your spouses’, or anyone else’s equity.
Keep in mind that in order to get the Certificate, the CRA has to reconcile the account, determine the share owned by the tax debtor and then use that figure when sending the Sheriff out to seize and sell the property.
10. The CRA has registered a lien against my property. Can I sell my interest to someone else and get removed off title?
If a tax debtor initiates a transaction which puts an asset out of reach of the Canada Revenue Agency not at Fair Market Value, the CRA has the ability to initiate a section 160 Non-Arms Length assessment and assess the person(s) who received the asset for your liability (minus consideration received).
11. Will bankruptcy free me of a lien?
Filing for bankruptcy, or filing a consumer proposal, does not discharge a lien against your property. If you go bankrupt on your CRA debt, the lien remains and – even worse – accrues interest over time. Even after your discharge from bankruptcy, the lien remains in force, until you eventually sell your home and the CRA’s priority is now second in line after the bank.
If after all that the tax debt is still remaining, then and only then because of the bankruptcy, will the tax debt no longer be owing.
Who Can Help?
The bottom line here is that tax liens can cause serious problems and it’s best to seek our help to resolve your tax issues before it gets that far. Even if a lien is in place in order to secure the Crown’s interest, it’s best not to ignore the CRA.
We have handled hundreds of liens, and will find the best solution for you. It might be refinancing your mortgage, paying out the lien, or temporarily lifting the lien in order to improve your arrangement with the CRA. Whatever the problem, no matter how complex, we have helped and can help.
Initial consultations are always free.
inTAXicating Tax Services.
Visit our website or send us an email at info@intaxicating.ca.
Toronto-based. Canada-wide.
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I am currently going through a divorce and my spouse five years worth of unpaid and unfilled income taxes. There are several liens against the property. I see that you have posted that I am not responsible for my spouses liens on the property. Where can I find the tax law that states that? My family lawyer requires this information in order to proceed with my divorce and I want to ensure that my assets are protected upon the sale of the house.
Any information you could provide would be greatly appreciated.
Thanks
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Hi Michelle,
For the benefit of those following my blog, or specifically this thread, I am posting a snippet of our many conversations here in order to answer the question.
It is my recommendation that in addition to getting all of your husbands filing up to date (because the balance(s) could be notional or arbitrary assessments), you would be best suited to have some discussions with the CRA’s assigned collector to see what it will take to remove the lien and the RTP’s.
If the balance were assessed, I would ask the CRA to remove it upon receipt of fax tax information from your soon to be ex-husband as they have probably captured enough money from him through multiple garnishments over the years.
I would also be forthcoming with any additional assets he may have should push come to shove, as the CRA might view this to be a ploy. All in all, however, he is either trying to delay the house sale as it would signify the real end of your marriage, or he is completely overwhelmed at having the CRA garnish, freeze and seize everything he owns. He just might not be able to deal with this at all.
Great speaking with you last evening. Looking forward to updates.
Warren
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My husband are separated and living apart, I am in the family home , there is a lien on the house for my ex’s unpaid income tax, it’s been there for 11 years and is now large. He has refused to deal with it. I would like to do some work on the house but the bank will not lend with the lien. My ex is 67, broke ,owns nothing and will never
have any money to deal with the Lien. I want to stay in the house but it needs work. I have been in the house by myself for the last three years and have paid all the expences, property taxes, insurance and have replaced the oil tank , cold water tank etc. , he has not paid anything. The bank asked if I had gotten the deed signed over to me, if I had they would be able to do something for me, but will his debt follow me if he signs the deed over? what can I do?
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Sec 357 of the Municipal Act deal with possible reasons to expunge taxes, also sec. 326 of the City of Toronto, Act.
However, in your situation , it may be under the Family Law Act. as it goes to the reckless spending of your spouse. (equalization) The circumstances on how the debt was manufactured is important to the Family Court. He may be responsible for it in its entirety. Therefore it does not come from your portion.
Property Tax is somewhat difficult and generally winds up in front of the ARB, (Assessment Review Board) and under certain conditions. They expect you to file your claim for the previous year before February 28th. If council does not deal with it, you will have until October 30th to file with the ARB. Realistically though this never happens. Regardless of what the law says, the city clerks dictate who and if you can even go to ARB.
Not trying to be confusing, but factual.
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Hi Paula,
Just gave this some more thought. If the balance owing to the CRA is the result of arbitrary assessments (the CRA picked a balance owing because your husband did not file) then you could step in and file those returns and that would reduce the balance owing.
The CRA is likely not to remove the lien just because your husband refuses to do anything with it, and having him sign the deed over to you would be worse because it would initiate a s.160 assessment against you for his debts.
What might make the most sense is to re-finance the property to pay out the lien. The lien would only grow if the CRA keep re-registering new liens to add the newer amounts owing on them. If not, the lien amount should be much less than the actual tax owing.
If you want to discuss this further, please email me at info@intaxicating.ca
Hope this helps!
Warren
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So here’s one for you – I have a lien from the CRA on my house which is currently being being sold (did not know they had done this as had been paying monthly installments to clear my debt)
The purchasing lawyer will not take the completion of the sale from my lawyer with the lien present
CRA will not provide anything in writing which explains to both lawyers that the lien is not transferable with the property – there is insufficient equity to repay the CRA debt in full
Basically we are at an impasse, with the closure of the sale, now unlikely to go through
The CRA have said over the phone that they will release the lien once my lawyer provides them with a copy of the sales agreement, the disbursements and a trust cheque for the remaining equity – however they refuse to provide this in writing
Any suggestions – my house is due to close on Friday the 30th May – everyone is nervous
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Hello Nathan,
I wish I saw this earlier! Has it been arranged?
Very common situation here is that your lawyer would request a letter with the balances owing from the CRA. The lawyer then makes an agreement with the CRA that upon closing the CRA receives payment in full of the liened amount(s). The house closes, the trust cheque goes to the CRA, the CRA releases the lien, and everyone is paid and the sale goes through.
Is this what is happening?
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He said there is insufficient equity to satisfy the CRA debt.
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To clarify, in the instance where there is insufficient funds to pay the CRA lien in full, the CRA takes the maximum amount of funds possible, removes the lien from the property, and in the event that there are no further properties or assets to secure the debt against, calls it a day and moves on.
The debt remains on the CRA’s systems, interest continues to accrue and other collection actions will need to be initiated in order to get payment.
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The lawyers know that the lien is not transferable. Clear title is expected by the purchaser.
When the financial institution releases the funds to the Purchaser to register the Mortgage on title, all liens and encumbrances must be dealt with. Your CRA lien, must be paid in its entirety and to the date of closing inclusive of interest and any outstanding penalties in order to be removed. Your lawyer will contact them to ascertain this amount.
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I have a 2mth old CRA lien registered on my home. My question is this. Is CRA now able to move forward with a Writ of Seizure and Sale? I am a single mother of young child. We have no where to go and no family in the city we live in. My rent elsewhere would be twice as much as what I pay now in mortgage and condo fees. I have offered payment options but the collections agent stated that the debt is too high for my suggested nominal monthly payments. A bankrupcy trustee has suggested that I just stop making my mortgage payments for 3mths, let the bank foreclose on my home, thus leaving it to the bank to then sell my home, get their mortgage back, and pay CRA. What are your thoughts here? Thank you so much.
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Hello Niki,
Thanks for your question.
The CRA generally does not seize and sell principal residences (it looks bad if they throw people out of their houses and on to the street, especially if they are single mothers with young children). They will, however, wait for years and years with the lien on the property waiting for you to need to re-finance or sell the property so they can get paid – with interest.
I do not agree with any trustee who would suggest that you stop paying your mortgage and have your bank foreclose on you.
I would, however, recommend speaking to a tax professional, such as myself, who can review the origins of the debt to see if the debt can be reduced (or removed) and then have a look at the potential to re-pay immediately, in the short-term, long-term or not at all.
Without knowing the full details about you, and about the debt (and your ability to pay – present and future) advising you to take a certain action would be irresponsible.
Please email me at info@intaxicating, or call me at 416.833.1581 if you wish to discuss this further.
Regards,
Warren
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Yes they could, but they won’t. Not how the CRA operates. I take it that these are not property tax.
Bankruptcy is probably the worst thing you could do. Your would lose control of your property where the trustee has indicated that the bank would sell it, so he’s not interested. The trustee does have authority to sell your property as he acts for the creditors. The bank will sell it for a song.
Look into refinancing the property possible extensive of time on the mortgage with an attractive interest rate will give you the funds required to remove the lien and perhaps much needed money in your pocket.
You need a good mortgage broker, or banker willing to extend such a loan or mortgage.
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I have a Writ on my property for $395,000 that was done Dec. 09/11 for my spouses outstanding taxes unpaid (they assumed the amount because he hadn’t filed for 6 years). The house is in my name only and only has my name on the Land Title. During this time my taxes were not completed also and they garnisheed me the amt of my husbands outstanding taxes. I quickly filed all my taxes, with me owing a smaller amount and paid my tax debt in full by Jan. 2012. In Jan.2012 they addressed a letter to me that they have cancelled the garnishee and I do not owe any taxes. My husband went bankrupt by April 2014. Can they put a Writ on my Land Title for his outstanding taxes even though he isn’t on the title and has never been. Could it of been removed?
Also very strange after 2012, filing my taxes I owed $10,000 for 2012 they put a Writ on for my personal taxes of $10,000. I understand the one for $10,000 which I’m trying to get an equity loan to pay off debt, my personal tax bill says I owe $10,000 plus interest, no where does it say I owe my husbands $395,000.
I did a “Writ” search on my land title and it only showed the $10,000 Writ. But a land title search showed previous writ for $395,000 plus my $10,000. I called CRA collections and they said I still owe $395,000. I know this probably isn’t enough info and I’m believe I’m not being treated fairly. When I spoke to CRA about the Writ for $10,000 back in 2013 that was done I asked if they would sell my home, the CRA agent told me, no not when it’s such a small amount. Just pay your bill. Help what should I do?
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Hi Julie,
Something here does not make sense at all. The CRA are unable to place a lien on a property for someone else’s debt unless;
1. The property is in his name also, or,
2. There was a transfer for less than fair market value which occurred when there was a CRA debt already.
Have you made any progress thus far?
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hi,
CRA registered a judgment on my Credit bureau along with a lien on my home. I am trying to refinance, but with this judgment on my credit bureau I am worried that my interest rate will be high and some banks do not payout Tax lien..
what can I do?
thanks…..
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Hi Nadine,
This is common and banks have been known to use this as an opportunity to turn away clients due to a perceived risk. I have worked with many people / businesses in a similar situation and together we have managed to re-finance through their current bank and via a mortgage broker re-financed with other financial institutions whereby sometimes are rates are even better.
I’m happy to advise / suggest, if you wish to speak further. Email me at worlans@intaxicating.ca
Regards,
Warren
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CRA: they have done arbitrary assessment on me for my 2007 tax year came up with a pile of good numbers on there behalf. To the point of me owing them 127,000 had my accountant refile that year in july 2014. i have needed to refinance in july 2014 still cant any one to look at financing because of the judgement against me and my home. Now they just sent me a letter requesting more dumb info when they have all they need in my letters from lawyer. oya they ended up owing me 150 buck for 2007 tax year. I keep sending them the info they want but i need to refinance. what can i do here ..
Thank you
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My former common-law partner had been audited for his self-employed business. The CRA registered a lien on our house. They could only register on his 50% as we are joint tenants and my portion is protected under me and I have always maintained and filed my taxes separately and do not owe any taxes. My partner filed for bankruptcy in an effort to get rid of the unsecured amount owing to CRA but the lien of the secured debt remains. The bankruptcy is coming to a finish very soon and the CRA DOJ is threatening to go to court for some of the unsecured as the amount is large. He is threatening to change our property tenancy agreement and foreclose, however, there is a huge mortgage already in first place that has never had a missed payment. This mortgage has been in place long before the CRA audit. Can Revenue Canada still foreclose when the bank has first place? The house is valued at about 500K and the existing mortgage is 300K and the lien by the CRA is approx 80K. Please advise. Thank you
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Can cra do an audit on my 2003 Gst in 2015?
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I currently got hit back in the fall with an $8K tax lien on my house. I don’t know if anything was registered because I talked to the CRA officer and he said a request for it is in process. I got only one thing in the mail saying that this is what is happening.. But nothing since saying that a lien has been registered. When i talked to the officer, I did apologize for not dealing with this, and gave him the true story about dealing with my son that has a brain tumor, He said if i only told him about this sooner, he would have dealt with this differently. So i really feel like a goofball.
However, now i don’t understand how liens on my titles work and why they affect closings etc…. my family wants to sell. and if doing so, would leave us with a lot of money, enough to pay all debts, and this lien, The bank said flat out i would never qualify for a line of credit because i owe the gov (scotia bank) and i feel i’ll never be able to touch my equity when it would just solve all my answers! and definitly have enough to put down on a 25% for a house where we want to move to.
When a buyer wants my house, why do they have to find out there is a lien when all that’s going to happen when i sell, the CRA takes their cash from the sale anyways? I really am confused with that. How is it that they sit there and say they are only securing the debt on the house “WHEN I SELL” but only makes it really difficult to sell if they did in fact put a lien on? Confused, but if correct, it’s just more evidence that the government sure is not the sharpest knife in the drawer.
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Hi David,
Sorry that I am just seeing this now. I had typed up a response, but I see now that it never posted.
If you still have a concern, please email me at worlans@intaxicating.ca, or call / text me at 416.833.1581 and I’ll be happy to answer any questions you have.
A quick reply for anyone else reading this comment:
CRA process is to secure their interests by placing liens on assets whenever they can. It paints you into a corner and ensures they will get paid.
First, they have to register the debt in court to ensure it’s a legit debt, plus it has to be high enough to be worth registering. Then they can register a lien whenever they want.
Once the lien is in place, the only way to remove it is through payment of the amount of the lien.
Banks will grant loans / re-finance assets in order to pay off a loan – I arrange these all the time for clients who need it. Anyone that says they cannot is not being truthful to you, or respecting you as a customer.
The lien does not impact sale unless the property is sold and the lien is not satisfied, then the CRA might / will not remove the lien, the sale will not go through and the buyer can sue you.
Or, as I prefer to do… At the time of sale, I arrange payment from the sale to go to the CRA through the lawyer who closes the property and as the lien is lifted, the sale goes through and that issue is put to rest.
Hope this helps. Happy to answer any additional question!
Regards,
Warren
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I would like to know if the CRA can put a lien on my house for unpaid taxes that my common-law partner accrued before we got together. The house is solely in my name and I paid for it in full, no mortgage, before we got together, therefore he doesn’t have any claim to my home. And can the CRA make me responsible for any payments?
Thank you,
Mary
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I am also in a similar situation and quite worried…. looking forward to the answer
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hi warren, just wondering… do you always get a notice if a lien has been placed on your home?
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Hi Jen, Simple answer here is yes, you should receive notice however there are instances where a notice has not been sent. It could be that you moved or it could be that the collector has not mailed the notice in order to keep it as a big surprise. Yes, that does happen quite a bit.
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what is the expiry of a writ that CRA has put on title?.
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Hi Sally. There is no expiry. A writ must be satisfied through payment in full of the amount registered as a lien against the asset, or must be removed by the CRA (assuming it’s the CRA that placed it on).
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Can you please tell me what Her Majesty the Queen in right of Canada as represented by the Minister of National Revenue means?
There is a lien on my house and this is how it reads.
Is there anything I can do??
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Hi Sue,
It means the Canada Revenue Agency have registered a lien against your house for taxes owing.
There really are only a few options which depend on why the lien was registered, which are pay it, or file whatever is owing that caused the debt which prompted the CRA to register the lien.
Of course, there is always the chance that it was registered by accident, as the CRA did to a client of mine… Human error.
Happy to discuss further if you would like. You can email me at worlans@intaxicating,ca and we can set up a time to speak. You would just need to gather as many of the notices / letters, etc., that the CRA has sent to you as they tell the tale.
Hope this helps.
Warren
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Hi Warren, great article. Here is my question.
When there are two liens on a house and it is being sold through power of sale in Ontario, one lien is from Revenue Canada and the other is a writ of seizure and sale for child support arrears, which one takes precedence? If there is equity left over after the bank gets their money, who is next in line? Revenue Canada or FRO?
Thanks very much.
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The CRA put a lien against my property in 2011 thereabouts. The lien was paid in full when I sold the house in September 2013. Repeated attempts to get this lien noted as paid and cleared on Equifax have fallen on deaf ears. The CRA maintains they sent me a letter stating the lien was cleared but that does nothing when I have potential employers and banks turn me down for work and credit cards because that lien still shows up as active on Equifax.
What can I possibly do to make the CRA inform the credit reporting agencies that my debt was satisfied in 2013. They were quick to put a lien on my house for back taxes when I was unemployed and very poor and now that I’ve done the right thing by clearing the debt they cannot be bothered to acknowledge that responsibly.
D
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Hi D,
Thanks for the question. This is a terrible situation, clearly your account is no longer in collections and thus no longer assigned to anyone, so getting a live human being to follow up on it has proven to be even more difficult because of recent privacy guidelines at the CRA.
Aside from working at the CRA for almost 11-years, I did work for one year at… Equifax! So I have a recommendation for you which should help your situation.
You are entitled to put a “note” on your credit bureau through Equifax and I recommend you adding a note which states that the lien was satisfied in full on (insert date) and that the CRA has not made the necessary steps to remove this from your credit bureau as promised. If there is space, you might want to add that you have the necessary documents or that a property search would prove that the lien is no longer in place.
This way anyone checking your credit bureau would understand the CRA’s dragging of their feet on this extra work matter.
Additionally, anyone who would deny your credit without doing their due diligence of checking into your statement that the notification should have been removed from your credit bureau, might not be the best lending partner. What if the lien was applied in error, but you have perfect credit in every other area? It happens quite a bit, actually.
Hope this helps.
Feel free to direct any further questions here or to info@intaxicating.ca
Regards,
Warren
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Hi,
I would like to ask, I was a director of an incorporation company which is owned by me and my wife. We had to close the company last year on July 31, 2015 because we had a lot of personal debts and also tax debts because we had an audit from the CFA. As per suggestion from our trustee of Bancrupty, we went to do consumer proposal and in order for us to do that we had to close our company and make a new company which we did as per her suggestion.
Shortly after we closed the old company, CRA came to do an audit again on our old company and putting more tax debt from our old company, so now CRA keep on sending us a letter asking us to pay those debts. My question are :
1. Are we as a director of the old company still liable for the tax debts from old company even though we are under consumer proposal which we filled it before the second audit because the amount of tax debts increase after the second audit?
2. Can cra put a lien on our house because of the second audit, even though we are under consumer proposal ?
Thank you for your answer.
Regards,
HO
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Hello HO,
Thank you for the comment / question.
This is a quite common occurrence where business owners are advised to close a corporation and open a new one without fully understanding the way these actions are viewed in the eyes of the CRA and the Income Tax Act / Excise Tax Act.
In the eyes of the CRA what has happened is that you have closed your business and filed for bankruptcy in order to delay / prevent the paying of taxes to the CRA when you (re)opened your business. Based on the fact that the CRA audited the business again and have assessed for the debts of the old business leads me to believe that the new business might have had one or more of the following characteristics;
The new business carried on business in the same location with the same goods / services, same suppliers or customers and same owners / operators / employees. Possibly the new corp and the old corp have the same name, or very similar names…
In these instances, the CRA will raise a s.160 Non-arms length assessment and assess the new corporation for the debts of the old corporation.
In that case, even if you are in the process of a bankruptcy or proposal, there is additional debt which falls outside the insolvency proceedings and thus are collectible 30 days after the date of the Notice of Assessment even if that additional debt is a result of an assessment moving the debt from the old corporation to the new corporation.
And the only way the CRA would be able to lien your principal residence for corporate debt is if they proceed to raise a Director’s Liability assessment against one or both directors. In that case they would have needed to prove to the courts that they were unable to get payment from the corporation. They have 2 years from the date that either of you have ceased to be director in order to assess you personally for the corporate debts.
Hope this helps!
Feel free to reach out through this blog, or via email at info@intaxicating.ca should you have any additional questions or wish to discuss this further.
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Hi Warren,
I would like to make a little correction in regard about the time that we closed the company, it is supposed to be July 31, 2014 and not 2015.
Thank you,
HO
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I am currently going through a divorce. Both my ex and I are on title and mortgage for the home. I live in the home with our children. We were close to reaching a settlement agreement, giving me sole ownership of the house – transferrring title and mortgage to my name, when I got a letter form land titles stating Revenue Canada has put a Writ of Seizure and Sale on my home due to my ex’s tax arrears. There is not much equity in the home to cover his tax arrears.
When we heard Revenue Canada was starting to garnish his wages a few months ago, my lawyer placed a lis pendens on my property which was in place before the Writ was put on. How does this affect me having the lis pendends in force?
What are my options? If a judge orders the title of home to be put in my name – can we change title with the Writ in place which would then take my ex off title and then Revenue Canada would have to remove the Writ? When I called Revenue Canada – they told me that the Writ will only be removed once taxes are paid – no transfer of title can take place. When my ex called – Revenue Canada told him that if a judge orders title to change names to me – then Revenue Canada would have to remove the Writ.
We are getting conflicting information and I don’t know how to settle this.
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A Certificate of Pending Litigation ,,, mean you have an interest in the property and no-one,,, can deal with it until you do
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Hello Warren,
My husband has personal tax he owes to CRA . His amount was 40,000 now it’s accumulated to 50,000. So the lien is on the house for 50,000. He also had loans he owed for two banks so as our house was originally paid of we asked to refinance the house. Our credit lines were 100,000 and 70,000 we asked the bank to pay only the 100,000 and the 50,000 and we could pay the one credit line after, the 70,000 now the bank and the lawyer paid of the two credit lines so we were left with the 50,000 for the CRA . My question is since we refinanced the house under my name only and not my husband because his credit he did not want to show as I am assuming its not so great and he is being paid cash now from his employer . How will it affect the property and me since his income is paid now in cash and he is taking his time collecting the monies to pay this lien . My income is nothing compared to his, am I liable for anything as I am the sole owner and the deed is on my name.
Susie
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Hi Susie,
I just read through your comment / question and I’m sorry for not seeing it earlier, but there are a couple of points here that need clarification, especially for anyone else reading this.
First off, the CRA would not be able to place a lien on a property which was in your name only, for a debt belonging only to your husband.
If, at any time in which your husband had a debt to the CRA he changed the ownership of the house to remove his name and add yours, for example, that would constitute a non-arms length transfer of a property for, likely, less that fair market value and the CRA would assess you for his debts.
As well, the fact that your husband is now receiving cash is only a concern if he is not declaring it because any assessment for unreported or unremitted payroll deductions would be assessed against his employer and if he were ever laid off, he would have no ability to claim EI.
If your husband qualifies for the CRA’s Taxpayer Relief program, I would recommend he apply. Otherwise, it is important to keep in touch with the CRA, and make payment(s) of as much as possible to reduce the amount of interest which will be accumulating.
Hope this helps!
Warren
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Hi,
I had a lien placed on my home in November 2014. At the time it was for 12.5K and I was paying it off at around $800/month. I was told by the officer that since it would take more than 12 months at that rate to pay it off they had to register a lien and they did just that.
As a result, I made some changes to my budget and accelerated my payments. I ended up paying off the full amount at the end of October 2015. After submitting my final payment I called the Officer in charge of my account and she indicated that she would have it removed and I should see something in the mail in the next week or so notifying this.
2 months go by and I have yet to receive anything. Out of curiosity I decided to order my credit report from Equifax and noticed that the public record is still on my account with no legal item status or satisfied date.
With this, I have two questions
1) Should it normally take this long to have this removed? I checked by account with CRA today and it’s still showing a $0 balance as expected.
2) When they do eventually remove this, will it still remain on my credit report or does it remain there for years to come? If so, how long should I expect it to be there for and negatively effect me?
Any help is much appreciated!
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Hello,,, I am currently working on a case where the property taxes have been been appealed for 17 years,,, however the Municipality has never heard one appeal,,, finally two years ago,,I filed an application in the Superior Court where the City did not dispute the appeals or that the taxes should not have been expunged as directed under 357 of the Municipality act, and 323 under the C.O.T.A. But instead stated that we would withdraw the case without costs to resolve the hearings on the matter,,,,, instead a few months later the City continued in their refusal to cash any funds forwarded to them and finally put a lien on the property ,,, this is 17 years from the date of cause,,,
My first question can they perfect their lien,,,???
would appreciate any thoughts on this,,,
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Interesting information, as you seem to have much information about CRA, most are not aware of.
If I may ask a question. I have been searching the CRA site as well as the internet and have not come across any answers for my question.
Does CRA have a right to register a lien on your home on a disputed tax owing amount? The Notice of Objection has been sent and is in place, as I have received conformation of such. I was told today that CRA have a right to register a lien on my home, even though the conformation letter states “do not pay this amount.”
Would much appreciate your expertise on this.
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Hi Mary,
Feel this is worthy of an explanation albeit much too late to help you, I’m sorry.
Yes, the CRA can register a lien in order to “protect their interests”, as that is not a collection action. Seizing and selling an asset is a collection action which the CRA would be prohibited from doing under the law.
Hope this helps.
Regards,
Warren
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Wrapping up our divorce – ex husband signs title of the home over. While in the title change process, ex husband also files for bankruptcy. Because of his bankruptcy, a writ has now been placed on the home which he no longer has title to. So now I’m stuck with this writ against my house with no warning of the bankruptcy. Completely blind sided. I’m not sure what my options are or where to even begin. My lawyer is suggesting that there might have been civil fraud committed on my ex’s behalf. Anyone…ideas? Suggestions?
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Hi Brittany,
Absolutely something is not right here. The CRA registers a lien for a tax debt owing to the owner of the property so if the debt is his debt and he was forced to give up his share of the house as a result of court orders, then there should have been no lien registered.
If, however, he just signed it over to you, then he would be opening up a liability for you, under s160 of the Income Tax Act for a non-arms length transfer of assets – meaning he moved an asset out of his name in order to prevent the CRA for getting access to that asset.
If this is still an issue, please feel free to email me at worlans@intaxicating.ca
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The CRA have a lien on our property and we are also in bankruptcy because of unrealistic amounts of fines and penalties. My question is our mortgage is coming up for renewal will we be able to negotiate they leave enough equity in our home so we don’t loose our house and we agree to pay them the balance of outstanding monies when the bankruptcy is complete
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My bank account has been frozen and the collections officer will not accept a payment plan. It will take 1-2 years for me to pay the balance…it is sales tax owing. Should I be concerned about owning a car? It is a family gift so that I can take my mother to the doctor but now I am worried that it will be seized and sold without warning. It’s worth less than debt and under $5000. I can’t seem to find info regarding other forms of property anywhere.
Thank you!
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Hi, I’m a shareholder in a family business that has made some unfortunate financial mishaps in the past. Currently the business owes and is paying past hst owed thru a monthly payment plan however what was set up was a very large amount. It’s a seasonal line of work, the business is just getting g back on its feet from winter. However we may need to look at assistance. If the business files for bankruptcy will cra go after owners personally for money owed and is there any leniency on the amount? Owners are related to me and I just worry about them.
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Good morning Mike,
The answer to your question about bankruptcy and Directors Liability is a good one because, yes, if the corporation files for bankruptcy, the CRA will look at the directors in order to assess them personally for the debts of the corporation.
One factor is the ability to pay for each director, so it’s likely if one director has more ability to pay than another (the others) that the CRA will go after them for the full amount.
One big concern I have is that the CRA does not handle seasonal businesses well, and they often run out of patience and force the issue. I strongly recommend having a back-up plan to deal with the CRA should the current arrangement suddenly no longer be acceptable.
Hope this helps.
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Hello warren
Could you reply please
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Trustees in Bankruptcy and even Tax Lawyers are limited when it comes to dealing with CRA liens registered against real estate. I have spent quite a bit of money with lawyers who were only able to reduce some of my interest and a little bit of penalties.
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Agreed. If the lien is already registered by the CRA, then it would survive a bankruptcy – meaning – all other debts would be removed but the lien and the debt would stay on the assets and could only be removed by paying it.
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Hello: I have owned my own home for 20 yrs . The man I married 7 yrs ago has outstanding debt to CRA. He has a small business and owns his own property. Can CRA lien my home? It is and always has been in my name only. However, we do reside in this home. We have an agreement made with a lawyer but it is only in effect if we separate/divorce.
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It’s your home, and registered in your name only, then unless you have a debt, the CRA could not register a lien for his debts against your property.
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I purchased a house with my elderly Mother several years ago and we registered as joint tenants. We both contribute to mortgage and upkeep, though My mother occupies the house and pays utilities, property taxes etc. I have another residence with my spouse that we occupy as our principle residence. The house owned with my mother had about $150K clear equity over the mortgage and credit line.
My mother had a Revenue Canada lien registered against title for her interest in the house of about $250K. As I understand it the lien can’t collect on my half of the house, and also it is unlikely that they will force my Mother out of her only realistic housing option.
First, would I assume that a sale would send her 50% only of the equity to satisfy the lien? Secondly a simple fact is that mother is elderly, retired with minimal income or assets and on the decline in terms of health. What happens in the case that she passes away and the balance of the house therefore reverts to me as the joint tenant? Does Revenue Canada then force a sale for their half, or is the lien of redundant value at that time due to the lack of interest of her estate? I do trust there would be an implication on her estate, which does not form part of my question. Thank you in advance as I am just beginning my jourbey into this uncharted, (for me,) territory,
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Hi Bob,
As I’m sure you have learned and found out, the 50% of the property that belongs to your mother is what the CRA can take if they were seize and sell the property – which they won’t so long as she is living there. Once anything changes and the property becomes a secondary property, then all bets are off.
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…For the record, the CRA took precisely 1/2 of the remaining cash from our controlled market price sale once the mortgage, utilities etc had been paid out, leaving my 50% to me. Once they were satisfied that there was no further value in the property they reasonably and quickly released the lien to permit the sale to close even though there was still a balance owing on the tax debt.
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i have a lien registered against my house and on my credit bureau, the house is being sold and the CRA debt will be paid in full, i am wondering how i get the CRA off of my credit bureau to make it easier to obtain a loan of a mortgage in the future. could i get your answer by email
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I have emailed you my thoughts!
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It is scary reading how many other people are struggling with the cra and their power. We are also struggling due to bad accounting practices and unfortunately having no knowledge with business. With the cra trying to collect money my husband lost his job and this didn’t help with money owing. In the last two years I have had my wages garnisheed from 40 to 60 percent until we had an appeal put in. They had attempted to freeze my husbands bank account then graciously accepted payments of 600. 00 a month when they realized there was an error with the bank account information. With all this I still have the monthly phone call that seizing the house is the next step because the debt will never be paid in our life time (we are in our mid 50’s). We have tried to refinance since we only owe 50,000 on the house however this is impossible since we have leins on everything with the cra. It has now been brought to our attention they are indeed following through and seizing the house. Trying to rent is not easy when the cra has leins on everything making your credit unattractive. This in itself isn’t the worst because I never know what the next step is they are taking -I am mentally exhausted never knowing what the next phone call will involve or when the accounts will be frozen more garnishees etc. We are currently appealing taxes from 2008 to 2014 but this in itself is also a lengthy process. Will this ever stop?
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Hi Laurie,
The CRA might place liens but they would never seize your house and force you out unless there was criminal actions on your side. In the majority of cases, they register liens and then wait for you to need to refinance or sell in order to get paid. If refinancing is a problem for you – and it shouldn’t be, I’ve never had a problem arranging for refinancing for clients – just let me know and I can introduce to someone who operates in the same manner as I do, which is with kindness, and respect.
As for the garnishments and other legal actions, they are likely the result of either an unacceptable re-payment arrangement or the fact that you have equity in your home and the CRA knows that the interest charges are killing you, so they’re trying to force you to refinance and earn credit by paying back a loan rather than paying back the CRA at 10% interest compounding daily.
If you need any assistance, please email me at info@intaxicating.ca
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Good morning!
My best friend and I are looking to purchase a 50 acre piece of property in BC. The previous owner has been deceased for 7+ years. He owed a substantial amount to CRA that exceeds the market value of the properties (he had 2, this being the smaller of). The executor of the estate has essentially sat on it and the beneficiaries understand that they likely will not receive any proceeds from the sale. Title searches on both properties show no liens and that they are registered in the executors name with the deceased indicated.
If the sale price can be agreed on, what are the potential pitfalls to avoid and what would be the best way to proceed?
Thank you kindly,
Ted.
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Hi Ted,
Aside from the liens, if the executor transfers the property to you and there were taxes owing to the estate the executor would have had to get a “Clearance Certificate” from the CRA. If he / she did not, then they would be personally liable for the CRA\s debts and not you. But the lien matter is the most concerning, make sure there has been a title search done and that title insurance is considered in case the CRA slaps on a late lien.
Hope this helps.
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Thanks kindly for the reply!
We are currently purchasing the property in question. A title search was completed with no CRA line indicated (only a couple BC Hydro right-of-ways). I have been informed that unless CRA stops the transfer by imposing a late lien, the sale will continue with a free and clear title. It is the executor’s responsibility to pay out CRA accordingly.
Can CRA slap on a line after the property is transferred? I would think that they can’t?
Thanks again,
Ted.
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Hi Ted,
No they cannot place a lien on a property once that property has been transferred unless the new owners of the property have debts to the CRA. Then the only lien they could place would be one for the debts of the new owners, not the debts of the former owner.
Hope this helps!
Regards.
Warren
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Hi Warren,
Maybe you’d be able to help me out or guide to the right direction. There’s a property in my town that I’m very interested in purchasing. However, it was previously owned by a Society that has not seized to exist. However, this society had bad debts to the CRA and in 2005 the CRA issued a Writ of Seizure and Sale to our local sheriffs department. I’ve followed up with the sheriff’s department and they’ve stated that it was issued for “filing purposes” only. I’m trying to call the CRA (number given) and I’ve just been given the run around with no real information. What should be my next step ? Any info provided, would be greatly appreciated. Thank you
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Hi Tom,
If there was a lien registered against the property, a property search would indicate that.
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Hi Warren,
Yes there is lien put on the property. My question is more regarding a strategy to force the CRA to enforce the Writ of Seizure, rather than just having it filed for filing purposes.
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Hi Tom,
That is a really tough ask of the CRA because between confidentiality and the CRA’s general dislike of seizing and selling principal residences, it would be very tough to get that message across to them.
If, however, the Sheriff were to tell the collector that the property was available and that the CRA could satisfy the lien by selling the property, then they might be tempted to act on it.
But it’s a tough case to make.
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Hi Warren,
You have shared a great information on this page about the removal of property tax liens in a most easiest way by writing in a manner than explains the governments reasons and in a language that everyone can understand.
I’m a Canadian accountant in Australia and I found this VERY clear and helpful as I try to service my clients.
The way you dissected it and analysed it is a gift. I have now tried to figure out how you did that so I can do the same thing here for my clients.
I’m glad I found your site. I just subscribed!
Thanks .
Corrine
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Great site.
One question if I may. When CRA writes off a debt do they remove the lien on my property.
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Hi Seymour,
Your question is interesting to me because you picked a topic – write-offs – which are not commonly discussed outside of the CRA, and how write-offs are processed when there is a lien attached to a property, again, a topic which is not commonly discussed. Liens, as you likely know, survive bankruptcy, so it would stand to reason that a lien would survive the moving of a tax account from collectible to uncollectible status, especially considering that the “deletion” of accounts is supposed to be a temporary moving of an account to the subledger where it could be brought back, re-opened and collected once the opportunity exists.
With that being said, however, one of the pre-requisites for submitting a tax account for deletion is the removal of any registered lien(s).
So, yes, liens are removed prior to writing off a balance.
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If common law spouse owes taxes can the CRA put lien on our joint owed home?
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