{"id":11110,"date":"2021-09-13T19:00:00","date_gmt":"2021-09-13T23:00:00","guid":{"rendered":"http:\/\/www.irasmithinc.com\/blog\/?p=11110"},"modified":"2025-06-25T10:55:12","modified_gmt":"2025-06-25T14:55:12","slug":"cra-lien-on-property","status":"publish","type":"post","link":"https:\/\/irasmithinc.com\/blog\/cra-lien-on-property\/","title":{"rendered":"WHAT IS THE POWERFUL CRA LIEN ON PROPERTY TOOL?"},"content":{"rendered":"
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cra lien on property<\/em><\/figcaption><\/figure>\n

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.<\/p>\n

Ira Smith Trustee & Receiver Inc.<\/a><\/em>\u00a0is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.<\/p>\n

If you would prefer to listen to the audio version of this CRA lien on property<\/em><\/strong> Brandon Blog, please scroll to the very bottom of this page and click play on the podcast.<\/p>\n

CRA lien on property: Canada Revenue Agency’s collection powers<\/strong><\/em><\/h2>\n

The CRA<\/em> (formerly known as Revenue Canada<\/em>) assigns “collection officers” to taxpayers who fail to make timely payments or who do not pay in full.\u00a0 For the CRA<\/em> to agree to a payment arrangement<\/em><\/a> (usually monthly payments<\/em>), the taxpayer must provide financial disclosure on a monthly basis (details of their expenses, their income, and their assets).<\/p>\n

Tax debts that cannot be settled through a payment plan may be registered in Federal Court<\/em>.\u00a0 Once the debt is certified, the certificate is equivalent to a judgment entered in court.\u00a0 This is called a memorial.\u00a0 If you own property, the CRA<\/em> can create a lien on your property based on your judgment.\u00a0 A CRA lien on property<\/em><\/strong> against your interest in your home is the most common CRA lien on property<\/em> they register.<\/p>\n

This Brandon Blog discusses a recent decision from the British Columbia Supreme Court that confirms that the CRA lien on property<\/em> becomes secured once they are registered.<\/p>\n

What is a Super Priority Lien?<\/strong><\/em><\/h2>\n

A super priority lien<\/strong> is a powerful legal tool that gives the Canada Revenue Agency (CRA) first claim on a debtor’s assets when taxes aren’t paid. This type of lien takes priority over almost all other creditors, including banks and mortgage companies. The super priority lien applies specifically to unpaid source deductions (payroll taxes) and GST\/HST taxes.<\/p>\n

How Super Priority Liens Work<\/em><\/h3>\n

When a business fails to pay certain taxes, the CRA automatically gets a super priority lien on the company’s assets. This happens because of something called a “deemed trust” in Canadian tax law. Here’s what this means:<\/p>\n

The government considers payroll taxes and GST\/HST as money held in trust for them. Even if a business owner spends this money on other things, the law still treats it as government property. This creates the super priority lien without any paperwork or registration.<\/p>\n

Key Features of Super Priority Liens<\/em><\/h3>\n

Automatic Creation<\/strong>: Unlike other liens, a super priority lien doesn’t need to be registered or filed. It exists automatically when taxes aren’t paid.<\/p>\n

Higher Priority<\/strong>: The super priority lien beats almost all other claims on assets, including mortgages and other secured loans.<\/p>\n

Specific Tax Types<\/strong>: This special lien only applies to source deductions (like income tax, CPP, and EI taken from employee paychecks) and GST\/HST taxes.<\/p>\n

Why Super Priority Liens Matter for Lenders<\/em><\/h3>\n

Commercial lenders face real risks from super priority liens. When a business owes these special taxes, the CRA’s claim comes before the lender’s mortgage or loan. This means:<\/p>\n