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Tax Arrears Certificate

Tax Arrears Certificate Mortgage — Redeem Within the Window

A registered tax-arrears certificate starts a redemption clock. Equity-based financing can pay the arrears in full and cancel the certificate before the window closes — banks won't fund with one on title, but a B-lender or private lender can.

Certificate on titleRedemption clock runningEquity-based approvalB-lender + privateCancels the certificateConfidential
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Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #13737 · Updated August 2026 · Reviewed quarterly; next review November 2026

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A registered tax-arrears certificate changes your situation in two ways. First, a redemption clock is now running — a defined window (in Ontario, one year from registration) after which the municipality can proceed to a tax sale. Second, the certificate clouds your title, so a bank won’t refinance you until it’s cancelled. That’s the trap: you need financing to clear the arrears, but the cheapest lender won’t lend while the certificate is there. Equity is the way out.

The short answer

A tax-arrears certificate is what a municipality registers when property taxes stay in arrears — it opens a redemption period (in Ontario, one year from registration) before a tax sale can proceed. Paying the full amount owing during that window cancels it. Because A-lenders won’t fund with a certificate on title, a B-lender or private lender funds the redemption on your equity. General information, not legal advice.

What is a tax-arrears certificate?

A tax-arrears certificate is a document a municipality registers against a property’s title when taxes stay unpaid (in Ontario, when any tax arrears are still owing on January 1 of the second year after the taxes became owing).Municipal Act s.373 It signals the municipality’s intent to sell if the arrears aren’t paid, and it opens a redemption period during which paying the full amount owing cancels the certificate and stops a tax sale. It clouds title, so A-lenders won’t fund until it’s cleared.

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What the certificate means for your options

The certificate is the formal turning point in the arrears process. Before it, you may still qualify for a lower-cost alt-A refinance; after it, an A-lender is essentially off the table until the certificate is cancelled, because it clouds your title. The upside is that the certificate also opens the redemption period — a defined window (in Ontario, one year from the date the certificate is registered) during which paying the full cancellation price cancels it and stops a tax sale.Municipal Act ss.373, 379

So a certificate is serious but not the end. A private lender will fund on equity with a certificate registered — that’s exactly what makes redemption possible at this stage. The amount to cancel rises over time (penalty and interest keep accruing), so confirm it close to when you plan to pay. This is general information, not legal advice; confirm your dates and amount with your municipality and a lawyer.

How the redemption is funded and the certificate cancelled

The mechanism is clean, and the money never passes through your hands. An alternative lender advances a mortgage sized to cover your existing balance plus the full amount to cancel the certificate plus costs. At funding, the money flows to your real estate lawyer in trust, who pays the municipality the full cancellation amount; the municipality cancels the certificate and it comes off title.

Qualifying is equity-first — generally the new mortgage stays under about 80% loan-to-value at alt-A, or 65–75% on private, subject to lender and file.basis You can often keep a low first mortgage in place and use a second to fund just the arrears. Once the certificate is cancelled your title is clean, and the plan is to refinance back toward A-lender pricing as your file stabilizes. See the full picture on our property tax arrears mortgage hub.

What you get

Why Canadians choose Mortgage Squad Advisors.

Equity-based approval — funds even with a certificate registered on title
Pays the full amount owing so the certificate is cancelled, not partially paid
Works within the redemption window to stop a tax sale
Private capital can fund quickly where the redemption deadline is close (no guaranteed timeline)
Existing first mortgage can stay in place — a second where it's cheaper
Your lawyer pays the municipality directly and confirms the certificate is cancelled
All lender, broker and legal fees disclosed in writing before you commit
Plan to refinance back toward A-lender pricing once the certificate is cleared
How it works

Three simple steps, no pressure.

1

Confirm certificate + window

Get from your municipality the exact amount owing to cancel the certificate (it rises over time) and the redemption deadline. Confirm the certificate details via title. Send us the property address and these details.

2

Fund the redemption

A B-lender where you have time and provable income; a private lender that funds on equity where the deadline is close. We disclose rate, LTV, fees and timeline in writing before you commit.

3

Cancel + plan the exit

Your lawyer pays the municipality the full amount, the certificate is cancelled and comes off title, and we set a target to refinance back toward A-lender pricing once your file stabilizes.

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FAQ

Common questions, answered.

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Can I get a mortgage with a tax-arrears certificate on my title?
Not from a bank — the certificate clouds your title, so A-lenders won't fund until it's cancelled. But a B-lender or private lender will refinance on your equity to pay the arrears out and cancel the certificate at closing. It's equity-based.
How long is the redemption period?
In Ontario, one year from registration of the certificate, during which paying the full cancellation price cancels it and stops a tax sale.Municipal Act ss.373, 379 Timing varies by province and municipality — confirm yours. The amount to cancel rises over time as penalty and interest accrue.
How much equity do I need?
Generally the new mortgage needs to stay under about 80% of value at alt-A, or 65–75% on private.basis Illustrative and varies by file. Meaningful equity is what makes the redemption possible.
How fast can it fund?
Private files can often fund within days once an appraisal and lawyer are ready, but it depends on appraisal, title, legal steps, lender and documentation — no guaranteed closing time. If your deadline is close, tell us the exact date.
Can I keep my existing first mortgage?
Often yes. If you have a low first-mortgage rate you want to keep, a second mortgage that funds just the arrears — behind your first — is frequently cheaper than a full refinance. We model both and pick the lower total cost.
What happens after the certificate is cancelled?
Your title is clean and the tax-sale process stops. We plan the refinance back toward A-lender pricing once the arrears are cleared and your file stabilizes — commonly around 12–24 months, a planning target subject to lender criteria.
Is this the same as your property tax arrears service?
It's the registered-certificate stage of it. For the full picture — early arrears through tax sale, all provinces, second mortgage vs refinance — see our property tax arrears mortgage hub.

Related products

Property tax arrears mortgage (hub)Tax sale mortgage (Ontario)Private mortgageB-lender mortgageJudgment & lien mortgageOntario tax-arrears timelineHow to stop a tax sale

Sources & references

Figures on this page are sourced below and re-checked each quarter. Rates, insurer rules and lender policies change — confirm anything you plan to act on with a licensed advisor.

  1. 1. Government of Ontario (e-Laws), Municipal Act, 2001, S.O. 2001, c. 25 (Part XI — sale of land for tax arrears, ss.373, 379) (accessed August 2026) — s.373: a tax arrears certificate may be registered when arrears are owing on January 1 of the second year after the taxes became owing. s.379: if the cancellation price (arrears, current taxes, penalties/interest and costs) is not paid within one year of registration, the land may be advertised for tax sale; paying it within that year cancels the certificate. General information, not legal advice.
  2. 2. Mortgage Squad Advisors rate desk (internal verification), Illustrative alt-A/private pricing and LTV ranges (reviewed August 2026) — Alt-A files typically to about 80% LTV; private files typically to about 65–75% LTV and fund faster. Illustrative, vary by file — not a quote.

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