Most homebuyers are rightfully concerned about house prices, but property tax rates shouldn't be overlooked. There's a significant difference in property taxes paid in Canadian provinces, so it is essential to determine how it is calculated and the implications on your property. Toronto currently boasts the lowest property tax rates in the province at 0.599704%, trailing Markham. The highest property taxes in the province at found in Windsor, which charges 1.775679%. Nonetheless, this doesn't mean property owners in Windsor are paying more taxes than those in Toronto. Various factors are considered when calculating property taxes and each case is unique. Below is a quick guide to Toronto property taxes, including how they compare with other places, the billing cycle and how to pay.
How much is property tax in Toronto?
Property taxes are calculated differently depending on the region. In general, the tax is calculated by multiplying the regional tax rate by the most recent property assessment value. In Ontario, it is based on the property's value, residential tax rate, educational tax rate and city building fund. Other provinces don't include educational tax rates. At the moment, the Toronto property tax rate is 0.599704%. However, there are various types of property and the tax rates vary. Here's a table indicating the tax rates for different types of property in Toronto:
Property | City Tax Rate | Education Tax Rate | City Building Fund | Total Tax Rate |
|---|---|---|---|---|
| Residential | 0.440230% | 0.153000% | 0.006474% | 0.599704% |
| Multi-Residential | 0.940384% | 0.153000% | 0.000000% | 1.093384% |
| New Multi-Residential | 0.440230% | 0.153000% | 0.006474% | 0.599704% |
| Commercial General | 1.183069% | 0.980000% | 0.008740% | 2.171809% |
| Residual Commercial Band 1 | 1.084052% | 0.980000% | 0.008008% | 2.072060% |
| Residual Commercial Band 2 | 1.183069% | 0.980000% | 0.008740% | 2.171809% |
| Pipelines | 0.846809% | 1.250000% | 0.012453% | 2.109262% |
| Industrial | 1.167874% | 1.067220% | 0.005792% | 2.240886% |
| Farmlands & Managed Forests | 0.110057% | 0.038250% | 0.001618% | 0.149925% |
As you can see, the 0.599704% tax rate is for residential property, which covers most Canadian homes. If you are planning to purchase a new house, this is the tax rate to worry about. Here's a sample calculation of the property tax you will pay if your home is valued at $700,000:
Phased-in property value = $700,000
Total tax rate = 0. 599704% (Council-approved city tax rate + City building fund levy + Education tax rate)
Tax = property value * total tax rate $700,000 * 0.599704%, which equals to $419,792.8
The Municipal Property Assessment Corporation (MPAC) determines the phased-in property value, while the Government of Ontario sets the city building fund levy and educational tax rate. In addition to paying the property tax, Toronto taxpayers will incur special charges and property tax fees and collection fees.
How Often Do You Pay Property Tax in Toronto?
Property taxes in Ontario are billed annually and there are various plans available, including installments. However, the billing cycle was interrupted by the novel Covid-19 pandemic that forced Toronto and other provinces to close inquiry and payment counters found in city hall and civic centres. The 2020 due dates for Toronto property taxes were extended by 60 days, which ended on May 15. However, if you are on a payment schedule or make tax payments in installments, there are various notes. You can find more information about the due dates on the City of Toronto official website.
How to Pay Property Taxes in Toronto?
It is vital to pay your property taxes on or before the due date to avoid penalties and interest on your charges. Paying your accounts on time could also earn you early payment discounts. There are various ways to pay your property taxes in Toronto, including:
Financial institutions – Involves paying through your bank or a financial institution. To pay using the bank, you must provide a 21-digit assessment roll number or property tax account statement. Log in to your bank account and select City of Toronto, Toronto, Toronto Tax, or property taxes as your payee. You can make payments using online banking, telephone banking, automatic teller, or in-person. Contact your bank if you encounter any challenges.
Mail-in payments – You can send a check by mail and they are accepted by their due date. Do not send any cash via mail as only cheques and money orders are allowed. The cheque should be payable to the Treasurer, City of Toronto. Once posted, cheques cannot be retrieved or sent back. However, you can contact the bank to stop payment on the cheque you don't want to be cashed.
PTP program – Pre-authorized tax payment program (PTP) allows the bank or financial institution to withdraw funds from your account automatically on the due date. Enrolling in the PTP program relieves you from making the payments each time, as they are automatically sent to the right accounts. However, PTP programs only cover regular installments and tax bills. You cannot make payments for supplementary taxes or omitted taxes using the program.
If a mortgage company pays your property taxes, make sure you forward your tax bill to their offices as soon as possible.
