Water and Property Tax Billing Considerations at Closing
The City of Hamilton recognizes that transferring ownership of a home or business is complex, and part of that process is ensuring the seller is making good on paying off municipal water utility charges and/or municipal property taxes. No buyer wants to be on the hook for another person’s unpaid bills – but it can happen.
For Hamilton properties serviced with municipal water and wastewater services:
Sellers should contact the City’s water billing agent, Alectra Utilities @ 1-833-ALECTRA (1-833-253-2872) to provide a forwarding address and move-out date. By doing so, Alectra can then forward the final water invoice to the new address.
Buyers should contact Alectra to advise of their move-in date and to provide contact information for future correspondence. Please note all residential accounts must be opened and billed in the name of the registered owner(s) of the property, and not the name of any tenant(s).
Additionally, buyers should request from Alectra an Arrears Certificate (applicable fee of $16.95 HST inclusive) that will provide the payment status of the water account and will advise if the account is being based on estimated readings.
The Certificate notes the account is subject to adjustment arising from the final water invoice. It is important the final invoice be based on an actual water meter reading taken on the date of closing (meter readings can be submitted to Alectra by phone or via an online form. Unbilled consumption is the responsibility of the property owner at the time an actual read is obtained.
Water and wastewater services are provided to a property, not a person, and are regulated under the Municipal Act. The Act gives municipalities the authority to collect unpaid fees and charges by adding them to the municipal tax bill for the property that received the service.
It is prudent for the Buyer to hold back funds from the seller to ensure the final water invoice is paid. Unpaid water arrears are transferred to the property tax roll, 60 post invoice due date and therefore, an unpaid final water invoice would become the responsibility of the buyer. Buyers may contact Alectra to confirm if the final invoice has been sent out and if it has been paid.
Buyers should review what is – and what is not – covered under title insurance policies. Some policies have an exclusion built in for final meter reading charges.
Property Tax Considerations
Purchasing a Tax Certificate (2023 fee = $68.10) is strongly recommended to identify the tax status of the property and ensure arrears are cleared in advance of closing. Other important items to be aware of to facilitate a more efficient closing includes:
- If making a property tax payment online or at the bank, please ensure the roll number used does not include the City of Hamilton’s “2518” in front of the roll number that appears on mail-in tax certificates (tax certificates purchased online do not have the “2518” as part of the roll number). Please only use the 11 digits after the 2518, as follows: 2518020-151-05540-0000
- The pre-authorized payment plan is linked to the property. As such, the vendor is required to cancel pre-authorized payments on the property being sold and reapply if they wish to resume pre-authorized payments on their new property. The City requires two weeks written notice to stop pre-authorized withdrawals. The cancelation form is available at www.hamilton.ca/payyourpropertytax under “Changes to your pre-authorized debit plan”. If the City is not provided with sufficient notice and a withdrawal is made after the closing, a refund will not be issued. The vendor will be directed to have their lawyer re-adjust for property taxes to take into account the additional withdrawal.
- The City will not action ownership changes for a sale date in the future or received by the vendor’s lawyer, unless the request is accompanied by the transfer deed. As such, ownership changes will only be actioned if received after closing and by way of either the transfer deed or notice from the purchaser’s lawyer.
Please direct any property tax related inquiries to: taxsupport@hamilton.ca or (905)-546-CITY (2489).