There’s that great old saying about nothing in life being more certain than death and taxes and the latter holds true, especially if you’re purchasing a home.
Besides the various fees and other taxes you will have to fork out, you will need to closely consider the property taxes of the house, building or property you’re considering.
Unlike land transfer tax, this is not a one-time cost. It comes back year after year. And while the average annual property tax bill is a relatively small amount compared to many household incomes, you need to bear in mind the burden of that tax each and every month.
Another consideration that’s nearly as sure as death and taxes: your property tax bill will likely increase every 1-2 years. Municipalities use property taxes to pay for the cost of road repairs, garbage and snow removal, parks, police, schools and social services. As those costs rise, so does the percentage of tax a municipality charges its residents.
This annual tax is levied within local municipalities so that there are many different rates within each province. For example, in 2013, your average Ontario bungalow paid taxes in the neighbourhood of $2,500 to $3,500. Generally speaking, property taxes are in the range of 0.5 to 2.5 per cent of a home’s market value. The more expensive your house, the higher the property taxes is the general rule.
Many homeowners pay their property taxes monthly, while others pay them quarterly.
Sometimes, for various reasons, the property taxes on a home may be too high when compared with other similar homes in your neighbourhood. You can attempt to dispute your tax bill by filing an appeal with your provincial assessment authority. In Ontario, the authority is known as MPAC, Municipal Property Assessment Corporation.