Tax sale at rural Cape Breton municipality draws unprecedented interest
One five-hectare property in Middle River, N.S., attracted 45 bids
Cape Breton's Victoria County had its most successful tax sale ever last month, prompting officials to wonder if the increase in interest is yet another sign of Nova Scotia's hot real estate market.
On March 22, the municipality received a total of 254 bids on 17 properties, the highest response to a tax sale on record. In comparison, the December 2021 tax sale received 50 bids on eight properties.
"We received bids all across Canada, as far as B.C. We received two from the U.S. The majority of them were from Nova Scotia, and specifically Cape Breton," said Alix Redden, the chief financial officer of the Victoria County Municipal Office.
Bids also came in from Saskatchewan and Ontario.
"It's far more interest than we have seen in our past tax sales," Redden said.
The Municipal Government Act allows municipalities to list a property for tax sale when owners fail to pay property taxes for more than a year.
Home prices in Nova Scotia have skyrocketed in recent years, and Redden said she believes the high price of real estate may be attracting people to the less expensive tax sale properties.
Of the 17 properties that were available for sale, 14 were sold, with bids ranging from $1,000 to $78,787.80.
One listing in particular attracted 45 bids, a five-hectare property on Cabot Trail Road in Middle River. The successful bid was $35,000. Redden said she couldn't remember a time when the municipality received as many bids on one property.
"Forty-five bids is quite a lot," said Adam MacNeil, manager of finance for the adjacent Cape Breton Regional Municipality. "I don't think we've ever [garnered] that much interest. But I guess it all depends on the property."
Victoria County's sale generated $248,000 in surplus, which goes into an account for 20 years until the municipality can access the funds.
Historically, tax sales were held in-person at the Baddeck courthouse. But due to COVID-19 public health guidelines, the municipality accepted bids through a tender process instead. Interested buyers mailed or dropped their bids off at the municipal office in the month leading up to the sale.
Larry Dauphinee, Victoria County's deputy warden, said this may have attracted more bidders. "People had more time to think about it, sit down, make their bid," he said.
In previous sales, advertised properties have drawn bids equal to the amount outstanding, or a bit more. Successful bids in the recent sale were closer to assessment value, with one 39-hectare property just north of Englishtown going for $66,500.
"This tax sale, it definitely showed an increase in the amount of bids dollar-wise," Redden said.
Dauphinee said there's a "real surge" of people moving to Victoria County, but a lack of land available to buy. Developments in the Ingonish area in particular are looking for places for potential staffers to live, without much luck.
"Entrepreneurs and businesses in the area are actually some of the people who bought up some of the land on the tax sale with the hopes of building some accommodations for employees," Dauphinee said.
Tax collections have been a "huge focus" for the municipality in recent years, according to Redden. "We're anticipating future tax sales to have comparable interest levels," she said.
The next tax sale is in June.
Dauphinee said he will be interested to see whether the tender process is what attracted bidders, or if it is due to a red hot real estate market in Nova Scotia.
"We're going to be watching it very closely," he said.
- An earlier version of this story said the property that received 45 bids is 11 hectares and located in North East Margaree. In fact, it is five hectares and located in Middle River.Apr 06, 2022 9:47 AM AT