While many people dream of owning a home in the Halton Region, some are discouraged by complaints about rising property taxes—and people who are already in the market often fret about escalating costs beyond their control.
But while people are quick to voice concerns over property taxes it’s sobering to look at the data and realize that some Halton residents are pretty fortunate.
That said, property taxes are an important consideration to make when purchasing a house—and they’re often overlooked by people who are thinking about mortgages, condo fees, utility bills and closing costs exclusively.
While property taxes can be substantial, some cities and towns charge more than others. Zoocasa, a real estate brokerage and website, recently compared property taxes across 35 municipalities in Ontario and found that, in some cases, homeowners in bigger cities are benefitting from relatively low costs.
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“The amount of property tax a buyer will need to pay is a considerable carrying cost that’s often overlooked, despite it being an ongoing annual financial obligation over the course of the home’s ownership,” Penelope Graham, managing editor, Zoocasa, said in the report.
“The amount of property tax paid should also be of particular note to buyers moving to a new city, as municipal tax rates vary widely across Ontario; the difference paid annually can be thousands of dollars depending on the size of the city, its council’s operating budget, and even factors such as the health of its housing market.”
According to calculations from Zoocasa, an Ontario homeowner living in Windsor, the city with the highest tax rate at 1.789394 per cent, would pay $5,873 more per year in property tax on a home assessed at $500,000 than one in the City of Toronto, which has the lowest tax rate in the province at 0.614770 per cent.
On the list of 35 cities, Milton enjoys a ranking of 3, Oakville comes in at 6, and Burlington comes in at a ranking of 7 (with Toronto being the least expensive city at number 1 and Windsor being the priciest at 35).
In Milton, the tax rate sits at 0.685776 per cent (and the average home price sits at $775,964). In Oakville the tax rate sits at 0.734441 per cent (with the average home costing $1,072,135), and Burlington sits at a tax rate of 0.783768 per cent (and the average home costing $786,667).
More information is provided in the infographic below, courtesy of Zoocasa.
So, how can you determine how much you’ll pay in property taxes?
“In short, the amount you’ll pay in property tax can be calculated by multiplying your most recent home value assessment by the residential rate set by your local municipality,” Zoocasa says, noting that in the province of Ontario, these are based on the value of your home (as assessed by the Municipal Property Assessment Corporation, the education tax rate, and the residential tax rate.
While no one likes to pay property taxes, Zoocasa raises a salient point—municipalities need to collect them to sustain their services. For most cities and towns, property taxes are one of few revenue-generating tools at their disposal.
But some cities work to keep taxes as low as possible, such as Toronto (which promised to keep the tax rate below inflation).
Graham also says that cities with high-valued local real estate and larger populations generally have more leeway on keeping their tax rate low, as the amount collected from individual homeowners is higher, and there are more taxpayers to contribute to the pot.
In Toronto, real estate prices continue to rise (home prices hit an average of $915,481 in June) and property tax revenues rise in tandem, giving council the ability to keep the rate low.
Graham says it’s a similar dynamic in Markham and Milton homes for sale. These municipalities, which round out the lowest three for tax rates at 0.659822% and 0.6857761%, respectively, have comparably higher average home prices of $914,776 and $775,964 that allow for overall lower tax rates.
In contrast, the cities with the highest tax rates often have the lowest-priced real estate.
Zoocasa says that condos and houses for sale in Oshawa currently sell at an average of $536,513, and come with a tax rate of 1.344725%. In Windsor, Thunder Bay, and Sault Ste. Marie – the three highest-taxed cities in the range of 1.7% to 1.5% – average home prices remain well below the $350,000 mark.
Cities with a lot of businesses can also go easier on residents, as businesses pay at least double the amount of tax.
So, where should you live if you want to enjoy low property taxes?
1. Toronto: 0.614770%
2. Markham: 0.659822%
3. Milton: 0.685776%
4. Richmond Hill: 0.688357%
5. Vaughan: 0.696147%
And where can you expect to pay more?
1. Windsor: 1.789394%
2. Thunder Bay: 1.598484%
3. Sault Ste. Marie: 1.529349%
4. North Bay: 1.501246%
5. Sudbury: 1.461888%
Do you think property taxes are too high in the Halton Region?