BEHIND ON YOUR CRA TAXES? READ THIS
- johnathanmcquoid
- Jan 17
- 2 min read
Falling behind on CRA taxes is more common than you think — and the stress can feel overwhelming.
We help homeowners every month who owe anywhere from $5,000 to over $300,000 in back taxes. CRA letters, threats, and collection notices can keep anyone up at night.
Here’s what you need to know 👇
🚫 Why banks say “NO”
Most banks won’t refinance your home if you owe CRA because:
• CRA can register a lien
• CRA outranks the bank
• CRA can freeze accounts
• CRA can garnish wages
This makes A lenders unwilling to help until the debt is cleared.
But you DO have options.
✅ OPTION 1: Use an Alternative (B) Lender
B lenders are more flexible and can often refinance even with CRA arrears.
They offer:
✔️ higher debt-ratio flexibility
✔️ 1–2 year terms
✔️ acceptance of non-traditional income
✔️ the ability to pay off CRA directly
Rates and fees are higher, but this is a short-term bridge to get the CRA cleared.
✅ OPTION 2: Short-Term Second Mortgage
If your current lender won’t refinance, a second mortgage can help you:
✔️ pay off CRA immediately
✔️ stop collection action
✔️ avoid liens or garnishments
✔️ stabilize your finances
Then, once the CRA debt is cleared and your credit improves, we can refinance you back into a better mortgage with an A or B lender.
⚠️ What CRA can do if you wait
Ignoring CRA debts can lead to:
• frozen bank accounts
• wage garnishments
• home liens
• seized refunds/credits
• legal escalation
Once CRA registers a lien, your options shrink — so acting early is critical.
📌 CRA Late-Filing Penalties
First-time late filing:
• 5% of balance owing
• +1% per month (up to 12 months)
➡️ Max penalty = 17%
Repeat late filing:
• 10% of balance owing
• +2% per month (up to 20 months)
➡️ Max penalty = 50%
Interest is compounded daily
Interest applies to:
• tax owing
• penalties
• previous interest
Rates can change every 3 months.
💡 Final Thought
CRA debt doesn’t have to ruin your finances.
There ARE solutions — but the earlier you act, the more options you have.
If you’re behind on CRA taxes and feeling overwhelmed, message The Frontline Mortgage Group.
We’ll review your situation confidentially and help you choose the safest and most affordable path forward. 💬