# How does the property tax system work in Canada?



## nwmea (Sep 10, 2015)

How does it work in Canada, specially is it the same within each province or are different? I m specially interested for Ontario scenario.


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## kcowan (Jul 1, 2010)

It is different in every county. Most use common property assessments, But how much you pay is set every year in the municipal mill rate. It include services and education.


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## Davis (Nov 11, 2014)

Try googling Municipal Property assessment Corporation - it runs property tax assessment in Ontario.


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## Just a Guy (Mar 27, 2012)

It varies everywhere, but the basic theory is, the municipal government sets a budget and determines how much money it needs to operate. They then figure out your portion of it by some method of "property valuation". For example, if your area uses "market valuation" they estimate the market value of all the properties, add them up and then figure out your portion as "your value"/"total value" times "the amount they want to collect", then they add on the portion of the eduction taxes that the province wants. 

The way they figure out your "valuation" can vary all over the place and, in some places, can be quite subjective. Personally, I want my ratio as low as possible, so I often appeal my property taxes to get them lowered. Other people I know feel that higher property taxes means their property "is worth more" and is better if they want to sell. I, personally, have never seen the property assessment factor into a selling price (but people like low taxes on buying).

This is a bit of an oversimplification, but it's pretty close to how municipalities collect their cash. Of course, some of their budget can come from "other", unofficial taxes like utility access fees, waste collection fees, speeding tickets, etc.


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## carverman (Nov 8, 2010)

Just a Guy said:


> It varies everywhere, but the basic theory is, the municipal government sets a budget and determines how much money it needs to operate. They then figure out your portion of it by some method of "property valuation". For example, if your area uses "market valuation" they estimate the market value of all the properties, add them up and then figure out your portion as "your value"/"total value" times "the amount they want to collect", then they add on the portion of the eduction taxes that the province wants.
> 
> The way they figure out your "valuation" can vary all over the place and, in some places, can be quite subjective. Personally, I want my ratio as low as possible, so I often appeal my property taxes to get them lowered. Other people I know feel that higher property taxes means their property "is worth more" and is better if they want to sell. I, personally, have never seen the property assessment factor into a selling price (but people like low taxes on buying).
> 
> This is a bit of an oversimplification, but it's pretty close to how municipalities collect their cash. Of course, some of their budget can come from "other", unofficial taxes like utility access fees, waste collection fees, speeding tickets, etc.


All the above and your lot size too. 

I have about an extra 6 foot strip of lot on my side of my front entrance of my semi (it is a side split). 

My neighbour's side split semi on the other side of the firewall just has the sidewalk entrance width and maybe about 1ft more before their neighbours retaining wall. 

No fence there, so if you back up, you can fall down into the neighbours sunken driveway.

I always get assessessed by MPAC for 3 or 4 thousand higher, even though both sides of our semi detached building , have A/C and basically the same layout, 
so I have to appeal it every time I get reassessed. MPAC thinks that extra 6 ft W x 100 L foot strip ( on the inside of my property fence), is worth more for tax purposes.
"After all, sir, your lot is wider than your neighbours!"

When I go to sell, it won't count as extra perhaps setting the resale value of my house 3 or 4 thousand, but with a cedar hedge on the outside of my property chain link, it does add a little "spaciousness" that my neighbour's semi doesn't have.


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## Rusty O'Toole (Feb 1, 2012)

Typically they use the market value assessment method. Every year they estimate the market value of every property. The taxes are a certain percentage of that. For example, in my town, .00557180 Municipal levy plus ..00471777 county levy plus .0095000 education levy.

This is broken up into 4 quarterly payments.

It works out to about $1200 a year for each $100,000 value. This is for a small town in Ontario, bigger cities are more expensive.

(4500 square foot brick Victorian 2 storey house on the main street of Brighton Ontario, assessed $169000 taxes $2077 for 2015)


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## CPA Candidate (Dec 15, 2013)

You open your wallet and the municipal government empties it. That's how it works.


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## RCB (Jan 11, 2014)

Rusty O'Toole said:


> It works out to about $1200 a year for each $100,000 value. This is for a small town in Ontario, bigger cities are more expensive.
> )


I wish. My small, northern Ontario city's property taxes are almost double that.


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## crr243 (Nov 2, 2015)

RCB said:


> I wish. My small, northern Ontario city's property taxes are almost double that.


Where mine are way less in Calgary.

I pay $2,000/year for a 1600 sq ft townhouse assessed at $335,000.


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## Spudd (Oct 11, 2011)

Yeah, I think bigger cities are usually cheaper (per $ value) because their house values are so much higher. For a similar house in Toronto vs my current small town, the property taxes are very comparable annually. If you look at it per $ of house value, Toronto is WAY cheaper.


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## Just a Guy (Mar 27, 2012)

It's based on relative prices, not actual prices. In a small town a $350k house may be the biggest whereas in Toronto it's a shack. If you own the biggest, you're expected to pay more because you are rich and can afford to.


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## janus10 (Nov 7, 2013)

We just received our first Assessment in 4 years. We are in the GTA West area and they have stated that our property value has risen about 30% in the last 4 years.

Fortunately, they phase-in the assessed value gradually (otherwise, we would be seeing an immediate 30% increase in property taxes!!!). They are dividing up the increase in value equally over 4 years and applying it to each year. Thus, we should likely see at least a ~7% increase in property taxes PLUS whatever increase in the mill rates.

I have been given an October 25, 2016 deadline to submit a request for reconsideration. I'll open up a new thread on that topic.


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## heyjude (May 16, 2009)

When I lived in Winnipeg the property taxes were (relatively) high, at least compared to the market value of the house. This was because there is a lot of old property and infrastructure to maintain, and houses are modestly priced. So, for example, on a house I bought for $85K in the early 90s, I was paying over $2K in property tax.


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