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What would happen if I was moving the same month as my property taxes are due?
So in other words I am moving from a house that I will be making a 3 month property tax payment on. Do I contact the town of Milton for find out what amount I should pay? Is this something that my lawyer takes care of?
My concern is that the instalment is due 2 weeks before I move. I don’t want to be penalized for not paying on time or the proper amount.
How do I know how much to pay? I don’t want to pay more then I have to
Thanks in advance

You pay the full amount of the instalment that is due, and your lawyer does the adjusting as part of the sale. (Ie, if you lived there for half of the time of the instalment, you get half of the money back from the new owners since you've prepaid for them).

Thank you !

Make sure you pay any instalment due on or before the day you move. If not the Purchaser's lawyer will be writing to yours to get any penalty back from you --after closing so if your closing is march 30th and there is a payment due on March 29th - pay it - and get a receipt from the bank or a stamp on the payment slip sent to you by the City/Town - the other lawyer will want to see that - your lawyer will be calling you soon to find out the total interim amount of the taxes and the amount that you paid towards the 2008 taxes and then there will be an adjustment. Dont forget that you owe taxes from Jan 1st to the day before your closing date - so you may not be paying enough if you are only paying the first instalment this year-- but dont worry just pay the amounts due and then the lawyer will make the right adjustment to the closing date - hope this helps - if you have any other questions - I do this for a living so - ask away............

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Valerie

Just a word of advice as this caught me offguard.

If your bank is paying your taxes for your mortgage, they need to collect money from you now in advance to make your next tax installment. Depending on how many months they have to collect the next payment will determine how much they collect from you. The kicker is that they are collecting for the FUTURE PAYMENT. Not your current one. you still will have to pay your own taxes from closing up to when the bank makes your first payment. Then the money they will collect from you should drop since they more then likely will have more time to collect the next installment.

I hope this makes sense. i was basically paying $500 a month to the bank for taxes then still got a bill for $800. I had to pay the $800 to the town and now I pay the bank $300 a month.

Matt

Matt - that is only applicable if you have not purchased your home brand new-- if you purchased re-sale- and your bank is paying them - talk to them - each bank works a little different either way - you should check with the bank at the beginning so that you can prepare for it if that is how they work - at least you could put some money aside - for the future payment.. remember if your house is brand new -the taxes do not get assesed for about a year-- and you will get your previous years tax bill eventually.

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Valerie

Thanks for all the assistance. I should be ok as the payment in question is the second instalment. Was just wondered if there was a way around not paying the full amount. From the suggestions I am reading….I will just pay the second instalment in full and let my lawyer take care of everything.
Thanks again

I can assure you that my house was brand new as I watched it from farm field to completion and my advice is accurate if you pay your property taxes through your mortgage. Your monthly tax payment to your bank is prepayment for you next installment. you are paying it in advance. That means someone has to cover your taxes from closing to your first installment which your bank was collecting from you. That is why some people pay their taxes themselves so the money they put away earns interest for them and not sitting at your bank to be paid out in 6 months or so.

Regards,
Matt

I recommend paying your own taxes rather than letting the bank do it. As Matt mentioned, you are giving them the money in advance to pay your bill, and they don't pay you any interest on it, plus now if any problems or issues crop up you get to play the "is it the bank or the town" game. If you want equal billing instead of 4 big payments, the town offers that as well. There is just no upside to the bank doing it unless you are unable to deal with bills, in which case you better get them to pay your hydro, gas, phone, etc... as well.

If you dont put 20% down payment there may be no choice but to let the bank pay it for you - most banks prefer to pay the taxes for you.

Matt - I bought my house brand new - received my tax bill and walked it over to the bank and they took care of it for me - so as I said before check with your bank re: paying the tax bill............. I dont know which bank you deal with but I know that they start collecting your taxes from the date your house closed. Taxes on new homes start accruing from the date that your house closes (for new homes) since no one has ever lived in it before - the only other taxes are land taxes which the builder should have taken care of. When your first mortgage payment starts you also contribute to your tax account and the reason for them starting your tax payments higher is because they need to build your tax account to pay for your previous taxes since they dont get the bill on new homes for about a year or so - or until they are assessed which means if you moved in in 2007 - they might not get that bill until the end of 2008 - but then at the same time they will also get a bill for the 2008 years taxes.

I can assure you that my advice is right - I am a real estate law clerk - work with mortgage brokers, lenders, tax department, homeowners everyday.. I know what I am talking about..

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Valerie

It could be that your house appraised higher and that was the reason... so you didnt put down taht much but the value increased from the time you purchased the property.

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Valerie

No its not -- every mtg I have done that is CMHC insured or Genworth Insured has had the tax payment added..

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Valerie

Why can't you just admit you made a mistake? You should not be handing out advice that confuses people. You cannot jump to conclusions based on what you read on the paperwork you process. the LAWYERS you work for advise the clients. You should not infer what their intentions were and pass that as fact to others.

I am done with this thread as I know I am just wasting my time trying to be polite.

have a lovely weekend.

Regards,
Matt

Matt- I stand by what I say - I have been doing this for 8 years - If I thought I was giving WRONG advice I would admit to it- call your lawyer or your bank rep and ask them- they will say the same thing as I have.

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Valerie

I have had a couple of PM's on this topic so thought I would post a general reply....

Some institutions prefer you let them collect the property taxes and pay them on your behalf - reason being..if the mortgage were to go into default and was sold by the bank the property taxes are paid before the bank...

ie.. you are not paying your taxes and the outstanding balance continues to grow
....now you are not paying your mortgage and the bank is forced to sell
...once the home is sold the property taxes are paid 1st and then the bank so the bank may not get enough $$ to actually pay out the mortgage

It is usually at the discretion of the lending institution or the actual branch if they decide to let you pay your taxes on your own.

I hope this helps.....

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Christina Jackson
Mobile Mortgage Specialist
TD Canada Trust
T: 647 292 7597
F: 905 377 1634
P: 866 767 5446
email: christina.jackson@td.com