When you create your budget as a new homeowner, you can’t ignore one common expense: property taxes. Canada property tax bills can easily add hundreds of dollars to your monthly housing costs.
The amount you pay in property taxes will depend on where you live and the value of your home. Therefore, you’ll want to know what you’re expected to pay before you purchase a home so that you can factor this expense into your monthly budget.
Key Takeaways
- Property taxes fund local services like police and fire departments, schools, road maintenance, garbage collection and snow removal, among other things
- In most areas, your annual property tax payment is based on the assessed value of your home and the local property tax rate
- Comparing property tax rates alone can be misleading as a lower tax rate in a city with high property values might result in a larger tax bill than a higher tax rate in a city with lower property values
What Are Property Taxes?
Local governments in Canada use property tax revenue to fund public services and maintenance, including:
- Emergency services, like fire and police
- Schools
- Road maintenance
- Garbage collection
- Snow removal
- Sewers
How Are Property Taxes Calculated?
The basic formula for property taxes is to multiply the assessed value of your home by the residential property tax rate for your municipality. The assessed value of your property may differ from the purchase price.
Property tax rates are made up of several different rates, including city and provincial tax rates, an education tax, a public transportation tax, and others. For example, to calculate the 2025 property tax for a residential home in Toronto assessed at $1 million, the formula is:
It’s also important to point out that some municipalities will provide a new assessment annually, so what you pay in taxes could change yearly, especially if you renovate or upgrade your home.
Additionally, some municipalities use a percentage of the home’s assessed value. For instance, Winnipeg calculates property tax rates using 45% of a home’s assessed value. Whereas others may cap the amount your property tax can increase year-to-year.
How Do You Pay Property Tax?
Typically, your local government will send you a property tax bill, which will outline the tax rate and amount to pay. You may have to pay your tax bill in quarterly or semi-annual instalments or in one lump sum payment.
Your mortgage lender may collect property taxes along with your regular mortgage payment and pay the municipality on your behalf. This could be mandatory if you are a first-time homebuyer or have limited equity in your home.
What is The Average Property Tax in Canada?
The chart below looks at the average property taxes by province and the top cities within each province. Based on information on the major cities, the table starts in British Columbia and moves east.
According to the cities we analyzed, the median tax rate in Canada is 1.0466370%.
(1) Saskatoon and Regina use 80% of the home’s assessed value to calculate property tax
(2) Winnipeg uses 45% of the home’s assessed value to calculate property tax
(3) Ottawa tax rate is based on a home in the Ottawa Transit Zone with fire services
(4) Hamilton tax rate is based on an urban home with full-time fire services
Research shows that Winnipeg has the highest property tax rate at 2.0327%. However, Winnipeg calculates property tax rates for residential homes using 45% of a home’s assessed value. In addition, an education property tax credit further reduces the amount of tax owing. With that in mind, Charlottetown has the next highest property tax rate at 1.67% for PEI residents.
Vancouver has the lowest property tax rate in Canada, at 0.311827%. However, housing prices are significant, as a home in Vancouver is much more expensive than a property in other cities like Saint John, New Brunswick.
Canadian Property Taxes By Province
If you want to look up property taxes in a region, you can start by checking out your municipality’s website. For example, if you Google “property tax Toronto,” you’ll end up on the provincial or municipal website where you can see a breakdown of the property tax rates.
Property taxes in Canada range from about 0.3% to over 2%, and property values also vary significantly. While comparing property tax rates is tempting, you can’t forget about the home value and what you’re getting for what you pay.
How Much is Property Tax in Ontario?
Property taxes in Ontario will vary depending on where you live. However, the Municipal Property Assessment Corporation (MPAC) assesses all properties. Moreover, your property assessment will be based on the current value, and the assessment notice will not be a tax bill. Your municipality will send out tax bills to homeowners.
Here are some highlights on property taxes in Ontario:
- Toronto: 0.754087%
- Ottawa: 1.2271030% (based on a residential home in Ottawa in a transit zone with fire services)
- Hamilton: 1.4970% (based on an urban residential home with full-time fire services)
- Kitchener: 1.356658%
The Provincial Land Tax Office in Thunder Bay collects property taxes for unincorporated areas through the Provincial Land Tax program.
How Much is Property Tax in British Columbia?
Vancouver’s residential property taxes are low at 0.311827%, and here’s how the rest of the highly populated cities compare:
- Kelowna: 0.44488%
- Victoria: 0.52034%
- Abbotsford: 0.412415%
How Much is Property Tax in Alberta?
If you’re planning to move to Alberta, you should know that property taxes in Alberta are generally in line with those in other major cities across the country. Here are some highlights from Alberta property taxes:
- Calgary: 0.61803%
- Edmonton: 1.01391%
- Lethbridge: 1.05941%
Bottom Line
Property tax rates in Canada vary depending on where you live and your home’s assessed value. Your local municipality’s website likely has a property tax calculator where you can estimate your payment and budget accordingly.
We must also stress that property tax rates often fluctuate based on the city’s budget and your assessed property value. As such, the amount you pay can change from year to year.
Ready to search for your next home? Browse listings in most cities in Canada on Zolo.ca.
Canada Property Tax FAQ
Are property taxes higher in Canada or the USA?
Property tax rates vary widely in each municipality or county in the USA and Canada, making comparisons difficult. However, in the United States, homeowners can often deduct property taxes on their federal income tax returns, while Canadian homeowners cannot.
Which Canadian province has the highest property taxes?
Property taxes vary from region to region in each province. However, Prince Edward Island and New Brunswick have higher-than-average property tax rates.
Which city in Canada has the lowest property taxes?
Vancouver has one of Canada’s lowest property tax rates at 0.311827%. However, the typical assessed value for a single-family home in Vancouver was $2,206,000 as of July 1st, 2024, which correlates to $6,878.90 per year in property taxes.
