While being a homeowner will bring you many joys, it will also come with some costs, including an annual property tax bill from the Government. Here are a few quick facts about paying property tax in the Greater Toronto Area.
Property Tax – What it is and How it is Calculated
Property tax is a fee paid by the homeowner, based on the assessed value of the property, to a governing municipality. In the City of Toronto in 2018, homeowners paid a total property tax of 0.64% to the city, based on the value of their home. So, for example, say your home is assessed at having a value of $500,000. You would multiply this amount by the property tax rate, 0.64%, which equals $3200. That would be the amount of property tax you’d pay in a year.
The Purpose of Property Tax
Your property taxes are used to fund a variety of services. In Toronto, the lion’s share of property tax revenue goes toward funding the police, Toronto Transit Commission and other emergency services. The tax also funds services such as forestry and recreation, community housing and shelters, as well as servicing the city’s debt.
Property Taxes on Detached Homes and Condos
Not surprisingly, you’ll pay more in property tax for a detached home than semi-detached or a condo unit. If you are a renter, you could still be affected by a property tax hike. True, the renter wouldn’t pay the tax themselves, but the landlord may increase rent to account for any boost in a municipality’s property tax rate.
GTA’s Highest and Lowest Property Tax Rates
It may be a surprise to learn that the City of Toronto has one of the lowest property tax rates in the Greater Toronto and Hamilton Area (GTHA). According to Ryerson University’s Centre for Urban Research and Land Development, homeowners in the City of Toronto pay the sixth lowest property tax rate in the GTHA. If you own property in the municipalities of New Tecumseth or Milton, you’ll pay the lowest rate in the region. However, if you own a home in King City or Oakville, you’ll have to bite the bullet—those two municipalities are home to the GTA’s highest property tax rates.
If you are thinking about buying a home, the location will have an impact on the amount of property tax you’ll have to pay. If you want to start house hunting, get in touch with Oppono to get all the information you need about getting a mortgage!