[et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”0px||3px|||” da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.20.2″ _module_preset=”default” width=”95%” max_width=”100%” custom_margin=”||-24px||false|false” custom_margin_tablet=”||-24px||false|false” custom_margin_phone=”||-34px||false|false” custom_margin_last_edited=”on|phone” custom_padding=”55px||||false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_breadcrumb _builder_version=”4.20.2″ _module_preset=”default” custom_margin_tablet=”” custom_margin_phone=”30px||-10px||false|false” custom_margin_last_edited=”on|phone” global_colors_info=”{}”][wahi_breadcrumb-link title=”Real Estate 101″ _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjcyMiJ9fQ==@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”Buy” _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjE2MzIifX0=@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IiIsImFmdGVyIjoiIn19@” _builder_version=”4.18.0″ _dynamic_attributes=”title” _module_preset=”default” module_text_color=”#686E6E” global_colors_info=”{}”][\/wahi_breadcrumb-link][\/wahi_breadcrumb][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.20.2″ _module_preset=”default” custom_padding=”16px||4px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.20.2″ _dynamic_attributes=”content” _module_preset=”default” header_font_size=”3.5rem” header_line_height=”4.5rem” header_font_size_tablet=”42px” header_font_size_phone=”1.5rem” header_font_size_last_edited=”on|phone” header_line_height_tablet=”3.5rem” header_line_height_phone=”2.1rem” header_line_height_last_edited=”on|desktop” global_colors_info=”{}”]@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IjxoMT4iLCJhZnRlciI6IjwvaDE+In19@[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”1px||1px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_socialsharing _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][\/wahi_socialsharing][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”15px||0px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.20.2″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|desktop” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” locked=”off” global_colors_info=”{}”]<\/p>\n
Want to reduce your property tax bill? Explore Ontario\u2019s top cities with the lowest tax rates and find the best options for your next home investment.<\/span><\/span><\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.24.2″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” custom_margin=”||11px|||” text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n By Josh Sherman<\/a>\u00a0<\/span>| 8 minute read<\/p>\n [\/et_pb_text][et_pb_post_title title=”off” author=”off” date_format=”M j” categories=”off” comments=”off” featured_image=”off” _builder_version=”4.18.0″ _module_preset=”default” custom_margin=”||26px|||” global_colors_info=”{}”][\/et_pb_post_title][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”0px||3px|||” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” width_tablet=”” width_phone=”100%” width_last_edited=”on|desktop” custom_padding=”0px||9px|||” global_colors_info=”{}” width__hover_enabled=”off|desktop”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9mZWF0dXJlZF9pbWFnZSIsInNldHRpbmdzIjp7fX0=@” align=”center” force_fullwidth=”on” _builder_version=”4.18.0″ _dynamic_attributes=”src” _module_preset=”default” custom_margin=”1px||29px|||” border_radii=”on|32px|32px|32px|32px” border_radii_tablet=”on|32px|32px|32px|32px” border_radii_phone=”on|0px|0px|0px|0px” border_radii_last_edited=”on|desktop” global_colors_info=”{}”][\/et_pb_image][et_pb_text _builder_version=”4.24.2″ _module_preset=”default” text_font_size=”1.13rem” text_line_height=”1.75rem” custom_margin=”-18px||2px|||” custom_padding=”||7px||false|true” custom_padding_tablet=”||7px||false|true” custom_padding_phone=”|15px|7px|15px|false|true” custom_padding_last_edited=”on|phone” text_font_size_tablet=”1.13rem” text_font_size_phone=”0.9rem” text_font_size_last_edited=”on|phone” locked=”off” global_colors_info=”{}”]<\/p>\n Homeownership comes with a lot of perks, but there are also expenses, such as property taxes \u2014 and these can add up.<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”1px||39px|||” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”16px||16px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.24.2″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” min_height=”158.4px” text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n Taxes are an unavoidable reality of homeownership in Ontario<\/a>.<\/span> \u00a0<\/span><\/p>\n These taxes can add thousands of dollars to annual ownership costs, so homebuyers should budget accordingly. To help inform potential homebuyers, this article will explain what property taxes are, how they\u2019re calculated, and pinpoint where to find the lowest property taxes in Ontario.<\/span><\/p>\n <\/span><\/p>\n <\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/p>\n <\/span><\/p>\n The property tax that a municipality collects is used to pay for the services and infrastructure it delivers and maintains, such as public transit, garbage collection, snow clearing, road repairs, amenities, and police and fire departments. \u201cIt covers something in every department. It\u2019s all the operating costs of all the departments. It\u2019s all the services provided,\u201d says David Amborski, a professor at Toronto Metropolitan University\u2019s School of Urban and Regional Planning as well as founding academic director of TMU\u2019s Centre for Urban Research and Land Development. \u201cIt covers all the operations of government, unless they can have other revenue sources cover part of them,\u201d he tells Wahi.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” background_color=”#edf7f3″ custom_padding=”32px||32px||true|false” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”||25px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.20.2″ _module_preset=”default” header_2_text_align=”center” header_2_text_color=”#38505b” header_2_font_size=”2.63rem” header_2_line_height=”3.75rem” max_width=”800px” module_alignment=”center” header_2_font_size_tablet=”32px” header_2_font_size_phone=”21px” header_2_font_size_last_edited=”on|phone” header_2_line_height_tablet=”3.75rem” header_2_line_height_phone=”32px” header_2_line_height_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”32px||23px|||” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”11px||14px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.24.2″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n According to the Federation of Canadian Municipalities, about 50% of the revenue<\/a> that cities in Canada generate comes from property taxes. \u201cSome municipalities have more reliance on property taxes than others,\u201d says Amborski. He notes other possible revenue sources for municipalities come in the form of grants from the provincial government or separate user fees. \u201cAll these things come into play,\u201d\u00a0 he continues.<\/span><\/p>\n <\/span><\/p>\n <\/p>\n <\/span><\/p>\n If you\u2019re looking at the places with the lowest property taxes in Ontario, Amborski suggests it\u2019s important to also consider what kinds of user fees are being charged in addition to property tax. A municipality could have some of the lowest property taxes in Ontario but higher user fees tacked on.<\/p>\n <\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/p>\n <\/span><\/p>\n <\/span><\/p>\n The calculations that determine how much a homeowner pays are based on two major components: the assessed value of your property, and the total residential property tax rate. Your property tax is calculated by multiplying the assessed value of your home, which appears on your property tax bill, by the total residential tax rate.<\/p>\n <\/p>\n Here\u2019s a breakdown of both components, beginning with home value<\/a> assessments.\u00a0<\/p>\n <\/p>\n In Ontario, home values are assessed by the Municipal Property Assessment Corporation, or MPAC for short. Created by the province, MPAC started operating at the end of 1998 as an independent not-for-profit corporation. It is funded by Ontario\u2019s 444 municipalities and has assessed more than 5.6 million properties since its inception.\u00a0 <\/span> \u00a0<\/span><\/p>\n Note that a home\u2019s assessed value doesn\u2019t necessarily indicate what it would sell for on the open market. For instance, the assessment doesn\u2019t account for current market conditions, such as supply and demand dynamics. Nor does it consider a homeowner\u2019s individual circumstances. For example, someone under financial strain may be willing to sell a property for less than its value.<\/span><\/p>\n <\/span><\/p>\n <\/p>\n MPAC most recently assessed home values in 2016. Another assessment was scheduled for 2020 but postponed amid the pandemic. The organization continues to reassess properties when they are upgraded, but this is done relative to 2016 values. That means that a condo built in 2020 would be valued based on what it would have been worth if completed in 2016.<\/span><\/p>\n <\/p>\n <\/span><\/p>\n Since the last assessment, home prices have soared, and some might be concerned that the next assessment will usher in much higher taxes as a result of increased property values. However, that may not be the case. In fact, in some situations, a homeowner\u2019s property tax could actually decrease, according to MPAC. \u201cIn the case of a province-wide Assessment Update, an increase in a property\u2019s MPAC-assessed value does not necessarily mean that the property\u2019s taxes will increase,\u201d notes MPAC in a statement to Wahi. \u201cIn this situation, the important factor is not how much an assessed value has changed, but how an assessed value has changed relative to the average change for the property type in a municipality,\u201d the statement continues.<\/p>\n <\/p>\n During a province-wide assessment year, if the rate at which a home\u2019s value has increased since the last assessment is below the average in its property class, it\u2019s likely the property taxes will decline. Other years, a higher assessed value would result in a bigger property tax bill if the total municipal residential property tax rate stayed the same or increased.<\/span> <\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n \u00a0<\/span><\/p>\n The total residential property tax rate is the sum of multiple rates which vary from municipality to municipality. Municipal governments set a municipal tax rate for different property types, and all municipalities collect an education tax, which funds schools and is determined by the province. Some municipalities collect additional property taxes as well. For instance, the total tax rate in Markham<\/a> also collects a tax for the regional government of York, and Toronto applies a City Building Fund tax, which supports transit and housing investments. <\/span> \u00a0<\/span><\/p>\n Each year, municipal governments set property local tax rates as part of the budgeting process. The rates are approved by the local council. <\/span> <\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n [\/et_pb_text][et_pb_code _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ sticky_enabled=”0″]
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<\/span>There are taxes when you buy: homebuyers are charged at least one provincial land transfer tax upon purchasing a home in Ontario (two if your home is in the City of Toronto, which has its own tax). <\/span>
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<\/span>Sometimes, there are taxes when you sell. Thanks to something called the <\/span>principal residence exemption on capital gains taxes<\/span><\/a>, Canadians don\u2019t pay any tax on the profits realized from the sale of their principal residence (where a person lives most of the time). However, capital gains on secondary properties, such as cottages or an investment rental property, are taxed.<\/span>
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<\/span>Homeownership also comes with recurring taxes. For instance, certain municipalities apply taxes on homes that are left vacant. This is done to encourage owners to rent out their unused properties and increase the supply of available housing. While such policies vary depending on local governance, there\u2019s at least one recurring levy that practically all Ontario homeowners face year after year: property taxes.\u00a0<\/span><\/p>\nWhat Are Property Taxes?\u00a0<\/b><\/h2>\n
Property taxes are set annually and collected by municipalities across the province.<\/span><\/p>\n“If the cost of services provided by a municipality changes, the municipality may choose to adjust the tax rate.”<\/strong><\/span><\/h2>\n
How Are Property Taxes Calculated\u00a0<\/b><\/h2>\n
To find the lowest property taxes in Ontario, there\u2019s more than one factor to consider.<\/span><\/p>\n
How Are Ontario Home Values Assessed? \u00a0<\/b><\/h2>\n
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<\/span>When assessing a property\u2019s value, MPAC considers as many as 200 factors, though there are five main determinants: location, lot size, square footage, age, and the quality of the home\u2019s construction. In terms of build quality, MPAC includes any known renovations. Local municipalities notify MPAC when they issue homeowners building permits, which are needed for substantial renovations.<\/span><\/p>\n
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<\/span>Ontario homeowners can check the value of their home, as well up to 100 others, on <\/span>MPAC\u2019s AboutMyProperty portal<\/span><\/a>.<\/span><\/p>\nTotal Residential Property Tax Rate Explained\u00a0<\/b><\/h2>\n
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<\/span>The total of these rates is added up and then multiplied by your home\u2019s assessed value. <\/span>
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<\/span>As an example, take the average-valued home in Markham<\/a>. This city consistently ranks as having the lowest property taxes in Ontario (by rate. In Markham<\/a>, homeowners pay a tax rate of 0.680463%. The total residential property tax includes the city tax, (0.165611%), regional tax (0.361852%), and the education tax (0.153000%). Take <\/span>Markham\u2019s average assessed home value<\/span><\/a> of $831,500 and multiply it by the total rate. You get an average tax bill of $5,658.05 per year.<\/span><\/p>\n
The total residential property tax rate commonly applies to the entire municipality but not always. London, Ont., is one municipality that has location-specific rates within its borders. The City of Hamilton<\/a> is another. \u201cThe result of area rating is that tax rates for certain services vary depending on where you live and the level of service offered by the City,\u201d according to the City of Hamilton\u2019s website<\/a>. \u201cDepending on the levels of service, the tax rate varies.\u201d Unlike Toronto, Hamilton has both urban and rural communities, and area rating is meant to take into account the differences between the two.<\/span><\/p>\n
How do Municipalities Determine Property Tax Rates?\u00a0<\/b><\/h2>\n
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<\/span>Since municipalities use property taxes to cover the operating and capital budgets, the level of service offered locally can move the needle considerably in terms of what homeowners pay. \u201cIf the cost of services provided by a municipality changes, the municipality may choose to adjust the tax rate. If it increases, everyone pays their fair share of the increase,\u201d reads a statement that MPAC sent to Wahi.\u00a0<\/span><\/p>\n