Mortgage Basics

The Canadian Property Tax Calculator For 2023

The Canadian Property Tax Calculator For 2023
Written by
  • Ashley Howard
| 24 May 2023
Reviewed, 12 June 2023

Table of contents

    It’s often said that death and taxes are the only sure things in life. As a homeowner, you will be responsible for paying property taxes to the municipality where your home is located. The money generated from these taxes is then used to pay for public services like garbage collection, schools, and road maintenance. 

    You will need to account for and budget for taxes annually; however, you may need to remit them on a quarterly or triannual basis. This guide will help you understand what goes into your tax assessment to help you prepare one of life’s certainties – property taxes.

    Key Takeaways

    • Property taxes are the primary source of revenue for municipalities. 
    • Property taxes are usually determined mid-year, with interim taxes paid based on the previous year’s mill rates. 
    • Property values are assessed by government-authorized organizations, which vary by province.

    What Is Canadian Property Tax?

    Canadian property taxes are a recurring expense collected from property owners by the municipality that then pays for the services they run. Depending on where you live, this rate is typically between 0.5% to 2.5%. These municipal services include garbage and recycling collection, road maintenance and snow removal, public transportation, emergency services, parks and recreational facilities, libraries, and more, depending on where you live. 

    The provincial government assumes this responsibility for those living in more remote areas of Northern Ontario that are unincorporated, meaning they are outside municipal boundaries. The provincial government will assess and charge property taxes to help fund community services as municipalities do. This is known as a provincial land tax (PLT).

    What Goes Into A Canadian Property Value Assessment? 

    A government-authorized organization, such as the Municipal Property Assessment Corporation (MPAC) in Ontario, will assess property values regularly to establish your property’s assessed value. These entities’ approach to property assessment and the frequency of property assessment vary by province. 

    These organizations assess the property value by analyzing what you paid for the property and the comparable properties in your neighbourhood. Location, age, and property size are also considered when assessing your property’s value and will be used to determine the municipal taxes you owe. 

    Tell Me: What Is the Property Tax Calculator

    So how to calculate property tax? It’s a straightforward calculation you can easily do by multiplying the assessed value of your property by the tax rate for the year in the municipality where you live. 

    Taxes owed for 2023 = Assessed value of property x tax rate for 2023

    The Official Property Tax Rates To Know 

    The official property tax rates are usually determined annually and finalized mid-year. You should anticipate receiving your property tax bill toward the beginning of the year with the option to pay it over the course of the year, such as monthly, quarterly, semi-annually, or annually.

    You can also opt to have your lender add your property taxes to your mortgage payments and remit them on your behalf to the municipality. However, not every lender will offer this option, especially if your mortgage is not insured. The lender may choose to administer your taxes because of the lack of built-up equity or downpayment that makes your mortgage insured.  This is always a great option to avoid coming up short on your budget to pay taxes. 

    The provincial governments highly regulate municipal finances with strict budgeting restrictions, so they must carefully balance their budgets accordingly with yearly expenses. Property taxes are the main source of revenue for municipalities, so determining these rates later in the year gives them time to properly account for how much or little revenue they must generate to make up for shortfalls. 

    You can usually find your property tax rate for the year online by visiting your municipality’s website. 

    What Are Interim Property Taxes?

    Interim property taxes allow municipalities to collect taxes while they work to finalize their budgets. Since the budget is finalized mid-year and will include the official property tax rate, these interim property tax bills are based on 50% of the prior year’s annual taxes.  

    This interim amount is paid in the first half of the year and put toward the final total property taxes owed. If the finalized property tax rate for the year is higher than the prior year, you will pay more taxes over the second half of the year’s payments to make up this difference. 

    How Do Property Taxes Vary by Canadian City?

    As property taxes are assessed based on property values, local real estate markets play a prominent role in determining property tax rates. Areas with higher-valued real estate and larger populations generally can charge lower taxes since real estate prices are much higher, and the amount collected from homeowners is compounded over more taxpayers contributing. If you disagree with the amount of your property taxes, you can submit an appeal to have them re-assessed. The request you must file differs based on your province.

    Commercial real estate also plays a role in determining tax rates, and each municipalities commercial-to-residential tax ratio may result in lower or higher residential taxes. Since businesses in most municipalities pay at least double the taxes compared to homeowners, this higher commercial tax rate can result in a lower residential tax rate for homeowners. The opposite is true if commercial rates are lower, as some locales may choose to have lower commercial rates if they feel they need to offer a competitive advantage to attract and retain businesses.    

    So how does the average Ontario property tax compare to other provinces? Canada’s property tax averages approximately 1.00%, the weighted average of all provinces. The below chart shows the average municipal tax rates for each province.  

    Province Municipal Property Tax Rate (%)
    Canada 1.00%
    BC 0.83%
    AB 1.12%
    SK 1.34%
    MB 3.27%
    ON 1.08%
    QC 1.30%
    NB 2.55%
    NS 1.10%
    PE 1.67%
    NL 0.77%
    Note: For the most current information about tax rates in your province, territory or city, consult the local government/municipality website.

    How does the property tax in London, Ontario, stack up against the rest of Canada? The below chart shows the municipal tax rates broken down by city or region. 

    City/Region Municipal Property Tax Rate (%)
    Vancouver 0.27%
    Victoria 0.45%
    Kelowna 0.43%
    Calgary 0.72%
    Edmonton 0.94%
    Saskatoon 1.25%
    Regina 1.42%
    Winnipeg 2.80%
    Toronto 0.63%
    Hamilton-Burlington 1.25%
    Ottawa 1.14%
    Guelph 1.18%
    London 1.42%
    Mississauga 0.83%
    Kitchener-Waterloo 1.14%
    Montreal 0.67%
    Quebec City 1.01%
    Gatineau 0.97%
    Saint John 2.27%
    Moncton 2.11%
    Fredericton 1.97%
    Halifax-Dartmouth 1.08%
    St. John’s 0.83%
    Note: For the most current information about tax rates in your province, territory or city, consult the local government/municipality website.

    Final Thoughts

    Property taxes are vital to keeping our communities maintained and running. From maintaining public services to funding schools, libraries and recreational facilities that keep our communities connected, these taxes are essential to ensuring that your community has the necessary resources to flourish.