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2525 blv Daniel-Johnson, Laval, QC, H7T 1S9
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Fax: 514-533-0143
Owners carrying a tax debt — Quebec
Renewal coming up with money owing to Revenu Québec or the CRA?
A tax debt complicates a renewal, especially once it has been registered against the property. Depending on the equity you have built and your situation, refinancing can sometimes clear the amounts owing and leave you with a cleaner structure.
- Debt owing to Revenu Québec or the CRA
- Mortgage renewal approaching
- Notices, collection action or a charge on the property
- Equity available in your property
Nectarios Petropoulos, mortgage broker (licence 237338), Dominion Lending Centres National. Free, confidential review with no obligation.
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We will contact you shortly to discuss your situation. If your request is urgent, you can also reach us at 514-999-9946.
Who this is for
Does any of this sound like you?
A tax debt is not like other debts: the creditor has powers no one else has.
An income tax balance built up
Self-employment, a business, an unusual year or late filings: the balance grew and interest keeps adding to it.
Collection action started
Wage garnishment, a frozen account or a formal notice: the situation has become urgent.
A charge on the property
A legal hypothec has been published in the land register, which closes off several financing routes.
Renewal within months
Your current lender will see the situation at renewal and may decide not to extend the loan.
The basics
Why tax debt weighs so heavily on a mortgage file
Tax authorities can register a legal hypothec against your property without going through a court. Once published, it takes rank in the land register and most lenders require it to be discharged at the time of financing. That is why the debt usually has to be paid out of the refinance, not afterwards.
The upside: this is exactly the kind of file where accumulated equity earns its keep. Here are the routes that can be reviewed.
Options that can be reviewed
Refinance with direct payout
The new loan repays the existing mortgage and pays the tax authorities directly, which allows the charge to be discharged.
Alternative (B) lender
Many alternative lenders will finance the payout of a tax debt, with more flexible criteria than the banks.
Private turnaround financing
When time is short or the file is too damaged, private financing can clear the debt quickly, with a plan to move to a cheaper lender afterwards.
Second mortgage
If the first mortgage is worth keeping, the amount needed can sometimes be financed in second position.
A payment arrangement with the tax authorities remains possible in some cases and occasionally costs less than refinancing. Both routes are compared with numbers.
The process
How the review works
A simple three-step process, at no cost and with no obligation.
We build the picture
Amount owing, status of the tax file, any registered charge, mortgage maturity, equity, income and credit.
We compare the options
We look at which lenders the file can go to and at what cost, with the debt payout built in.
We clear it up
If you move ahead, the financing is structured so the debt is paid and the charge discharged at signing.
What changes
What the review can give you
Every file is different and no outcome can be guaranteed in advance. Here is what the review usually gives you.
- Whether your equity covers both the debt and the refinance, as a number.
- What a land-register charge actually does to your financing options.
- The cost of refinancing compared with a payment arrangement.
- A way to avoid reaching renewal with the tax file still open.
Who you will be talking to
A mortgage broker specializing in non-standard files
Nectarios Petropoulos is a mortgage broker with Dominion Lending Centres National and has worked since 2016 on files involving tax debt and legal hypothecs registered against the property.
A broker works with several lenders: banks, alternative lenders and private lenders. The job is to compare what exists for your situation and explain the consequences of each option, including when doing nothing is the better call.
- Broker
- Nectarios Petropoulos
- Licence number
- 237338
- Brokerage
- Dominion Lending Centres National
- Office
- 2525 Daniel-Johnson Blvd, Laval, Quebec H7T 1S9
- Phone
- 514-999-9946
Frequently asked questions
Tax debt and mortgages: your questions
Can I use my mortgage to clear a tax debt?
Possibly. Depending on available equity, your income, your credit, the amount owing and the lender's criteria, a refinance can pay the amounts due to Revenu Québec or the CRA. Funds are generally paid directly to the authorities by the notary.
What is a tax legal hypothec?
It is a charge published by the tax authorities against your property to secure a debt. It takes rank in the land register and usually has to be discharged before a new lender will fund. Its presence shortens the list of possible lenders without eliminating it.
Can a tax debt block my renewal?
Yes, it can influence the lender's decision, particularly once it has led to collection action or a registered charge. Many lenders check the land register before extending a loan.
Do I need to settle the debt before applying?
No, and it is often impossible. The payout is generally made out of the refinance itself, at signing with the notary, which is what allows the charge to be discharged.
What if I have not filed my returns yet?
Most lenders require filings to be up to date along with notices of assessment. Catching up on missing years is often one of the first steps in the plan.
Why act before the renewal?
Because a file prepared months ahead reaches more lenders on better terms. Waiting for your current lender's answer narrows the options exactly when you need them most.
Renewal approaching with a tax debt?
Let's see what your equity allows and which strategy is realistic in your situation.
The information on this page is provided for general guidance only and is not an offer of credit, a guarantee of approval, or tax or legal advice. Questions about your tax debts belong with your accountant, tax specialist or legal advisor.