Introduction
Many taxpayers are surprised to learn that the Canada Revenue Agency (CRA) may take steps to secure unpaid tax debts against real property.
One collection tool available to the CRA is the registration of a lien against a taxpayer’s property.
Understanding how tax liens work is important for anyone dealing with significant tax debt.
What Is a CRA Tax Lien?
A lien is a legal claim registered against property to secure payment of a debt.
When a CRA lien is registered, it may affect a taxpayer’s ability to sell, refinance, or transfer the property until the debt issue is resolved.
Liens can be registered against various types of property, including residential and commercial real estate.
A CRA lien can have significant consequences for property owners.
When Can the CRA Register a Lien?
The CRA generally considers liens when tax debts remain unpaid and collection efforts have not resolved the issue.
Each situation is unique, and the CRA may consider various factors before pursuing this type of collection action.
Ignoring tax debt can increase the risk of more serious collection measures.
What Happens After a Lien Is Registered?
Once a lien is registered, the taxpayer may encounter difficulties when attempting to sell or refinance the property.
Potential buyers, lenders, and legal professionals involved in a transaction may become aware of the registered claim during routine title searches.
In some cases, resolving the lien becomes necessary before a transaction can proceed.
A registered lien may complicate future real estate transactions.
Can a CRA Lien Be Removed?
The options available will depend on the specific circumstances of the taxpayer and the nature of the outstanding debt.
Obtaining professional advice is often important when dealing with a CRA lien, particularly where significant assets or real estate transactions are involved.
Early action may help prevent additional collection issues.
Contact HLG Tax Law
If you are concerned about a CRA lien or have received collection notices relating to unpaid tax debt, HLG Tax Law can help review your situation and discuss potential options.
Contact HLG Tax Law today for a confidential consultation.
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