Last week I introduced you to the big wide world of taxes in real estate. While we  specifically focused on land transfer tax, today we will talk about property taxes. It can  be easy to mistake or confuse the different taxes!



Property tax rates in the GTA vary depending on the municipality, type of property you  own (residential vs. multi-residential vs. commercial) and are set annually. For  instance, Toronto property tax rates include an education tax and a city building fund  tax.



The amount of your property tax is calculated on your property’s phased-in property  assessment value, determined by MPAC (Municipal Property Assessment Corporation).



For example:

MPAC has assessed your home at $1,000,000 for 2024. Based on 2024 Toronto  property tax rates, you would owe: 

Property tax: $5,060.79 

Education tax: $1,530 

City Building Fund: $71.95 

Total Taxes*= $6,672.74


Good news: MPAC property assessments don’t really reflect current market value, so  while you may have paid $1,500,000 for your house, MPAC probably has you paying  taxes on a much lower assessed value.


 

When are Property Taxes Due?

If you enroll in their pre-authorized tax program, you can choose to pay in two  installments (March and July); 6 installments (March, April, May, July, August and  September); or in 11 installments (due every month except January). Many people roll  in their property taxes with their mortgage payments, and their lender takes care of the  payment directly.


 

Special Property Tax Circumstances

New Homes and Condos – Tax Implications


If you’re buying a brand-new home, you can usually expect to pay more taxes than you  would on a resale home, because MPAC will value the property using current market  activity, while a resale home will be subject to a phased-in value that doesn’t generally  reflect real market value.



Renovated or Flipped Homes – Tax Implications


If your home has been significantly renovated or flipped, you will likely be re-assessed  for tax purposes and your taxes will go up (sometimes by a lot). 



Homes That Have Not Yet Been Assessed – Tax Implications


MPAC usually assesses newly built homes within 6 months, so if you’re buying a home  that has not yet been assessed (eg. a condo that’s only been occupied for a few  months), that means that no property taxes have been paid to the city. Your real estate  agent will insert a clause into your offer to ensure that you are not stuck with the builder  or previous owner’s tax bill.



Next week we’ll unpack HST, capital gains tax and income tax as they pertain to real  estate!





If you have any further questions about this week’s topic pertaining to property taxes, or  last week’s topic about Land Transfer Taxes, or you just have a question about real  estate in general, you can reach out by calling me at 905-683-7800.





 

Thanks for reading today’s BLOG!!!

Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com

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