It’s no secret that real estate is extremely valuable in Oakville and surrounding cities, and even though most people are aware that property is costly to purchase, not everyone takes annual property taxes into account.
“However, there’s one significant carrying cost that’s often overlooked, especially for buyers striving to break into highly coveted neighbourhoods – the amount of property tax you’ll need to pay each year.”
What is Property Tax?
Zoocasa says that, in Ontario, where the levy accounts for $19 billion in revenue, property taxes are comprised of three parts:
- The overall assessed value of your home, as determined by the Municipal Property Assessment Corporation (MPAC). Zoocasa explains that this takes into account recent comparable home prices in your neighbourhood, as well as your home’s specific features (such as if you’ve renovated or installed a pool).
- The Education Tax Rate, implemented by the province of Ontario, the proceeds of which are used to fund regional schools.
- The Residential Tax Rate, which is determined annually by a municipality’s city council, based on how much funding must be raised to meet their budget requirements.
“Because property taxes increase in tandem with a property’s value, that can lead to tax shock for homeowners in neighbourhoods where home prices are rapidly appreciating,” Graham writes.
Property taxes vary on a city-by-city basis.
“…Some cities tax at a higher rate based on population, infrastructure needs, and political motivation. Because property taxes support all manner of municipal services, such as emergency and police services, parks and recreation, social programs, and transportation, the rate charged depends heavily on what council needs to spend that year,” Graham writes.
Zoocasa points out that, interestingly enough, Toronto residents–who live in a city where council opts to keep the rate at or below inflation–actually pay at the lowest tax rate in the province at 0.63 per cent.
In Oakville, property tax on the average home price amounts to $8,087 a year. How much does a home typically cost in Oakville? The aggregate price (meaning an average that includes both low and high-rise home types) sits at $1.1 mllion.
According to Zoocasa, the property tax rate in town sits at 0.75 per cent.
That essentially means that while Oakville residents pay higher property taxes than residents in Toronto, Mississauga, Caledon, Aurora, Markham, Burlington, Milton and Halton Hills, among others, they pay less than homeowners in King and Richmond Hill.
To find out how property taxes differ, Zoocasa says it calculated the average amount of tax paid, based on the municipal tax rate and average home price, in each region of the GTA.