Page 7 - REN July-Aug 2021

Understanding Property Tax and

Assessments in Canada

Gord Brown courtesy REALTOR.ca
f you’re on the hunt for a first home, or even settling in, you’re likely bracing for the inevitability of paying property
taxes. You probably saw the annual property taxes displayed on REALTOR.ca property listings, and might be
Iwondering who sets these rates, what purpose property taxes serve, and how tax rates are determined.
Fortunately, you’re in the right place! Let’s put the magnifier on property tax assessments across Canada.
What is property tax?

Property tax is paid by landowners and funds municipalities’ public services, such as emergency services (fire, police,
and paramedic), public schools, parks and trails, as well as road and sewer maintenance. The property tax is set based
on the percentage of the market value of a given property, whether it be residential, commercial, industrial, or farm,
and is paid to your municipality or regional municipality.

Can I be exempt from property tax?
Some properties and owners may be exempt from paying this tax, including religious buildings, low-income
households, and any federal or provincial property. Municipalities set these rules, so it’s best to consult your local
municipality for more details on exemptions and eligibility.

How is property tax calculated?
Property tax is determined by multiplying the value of a property by the base municipal and education taxation
rate. These rates are set according to the type and use of a property by elected officials based on the city’s budget.
They’re also determined by how much revenue comes from services, fines, and provincial transfers. Property values
are determined with regular property tax assessments.

For instance, if you owned a property valued at $300,000 and the combined municipal and education tax rate is
1.13%, your annual balance would be: $3,390.

Your municipality will make the information in your tax statements as clear as possible so you know exactly what
makes up your property tax. Some charges like waste removal or rural stormwater drainage (ditches) may show up as
a flat fee, depending on your municipality or property location.

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