One of the most frequently asked questions I get in real estate from consumers is about property taxes. When looking to buy either a full or part time home it’s a relevant question to ask regarding carrying costs when budgeting and or determining how much they should or can afford to spend. Some consumer websites don’t show the taxes for a property that is listed for sale and even if they do such as www.realtore.ca the year is not given so who’s to know if the amount shown is current and or correct?
When we as REALTORS® list a property for sale, property taxes is a mandatory piece of information we must obtain along with the property’s tax roll number, the legal description, monthly condo fee if applicable and so on. Annual property taxes are a significant expense for homeowners to consider and let’s face it, taxes of any type seldom go down. The assessed value of your property is determined in Ontario by the Municipal Property Assessment Corporation (MPAC) multiplied by the full tax rate in your municipality is what determines the annual taxes payable on your home or other property in any given year. In addition to the municipality’s own tax rate, the full rate of taxes for your property also includes taxes payable to the County as well as that portion which goes to finance education in your given region.
In our local real estate market we for the most part have two Counties, Simcoe and Grey which includes the municipalities of Clearview, Collinwgood, Wasaga Beach, the Blue Mountains, Grey Highlands and the Municipality of Meaford. While the County tax rates are consistent through their respective areas, the Municipal tax rates can vary substantially from one area to another hence property taxes can fluctuate significantly. A three bedroom two bath home in one municipality might have annual property taxes of $4,000 whereas that same house in another area the taxes might be several hundreds or even thousands of dollars more.
In preparing the chart below I used the 2021 year-to-date “median” sale price for residential properties in our market to the end of May which is $726,350. What I am addressing here is the difference in property taxes amongst the various local municipalities noted above that I deal with regularly. Sales prices are typically well above the current assessed value as determined by MPAC but that too is changing as the Province moves more and more to “current value assessment.” A disclaimer regarding “current value assessment” is in fact included as paragraph 22 “PROPERTY ASSESSMENT” of the Agreement of Purchase and Sale document that we used in every real estate sale transaction across Ontario.
In order to provide meaningful and accurate information to my clients and consumers, I have tracked property taxes rates in our area for many years and once again the Municipality of Meaford has the highest residential property taxes in our area. There are several reasons for this and I will cover that in a future post. A home with an assessed value of $726,350 in the Municipality of Meaford will pay property taxes in 2021 of just under $9,500. Conversely, the municipality with the lowest tax rate is Grey Highlands which includes places such as Kimberley, Flesherton and Markdale. That same house with the identical assessed value with have annual taxes payable in 2021 of just under $4,400 a difference of over $5,000 or 53% less than in the Municipality of Meaford.
It is interesting to note that both the Town of Collingwood and the Township of Cleaview have similar tax rates with the Coliingwood home having property taxes that are just $200 more than a house with the same MPAC assessed value in Cleaview. Taxes in these two municipalities are 13% to 15% lower than in the Municipality of Meaford while the Blue Mountains and Wasaga Beach have taxes that are 32% and 23% lower respectively.
Property taxes is something I began tracking several years ago when clients of mine from Toronto stated that their property taxes in Collingwood were more than the taxes on their home in the city. That came as no surprise nonetheless I did my own research to verify if this was correct and it was. To add some additional information into the mix, I have added a City of Toronto home with an assessed value of $726,350 into the revised chart below. As you can see, property tax on the Toronto house is at the lower end of the scale and fall between property taxes in Grey Highlands and the Blue Mountains.
At this point you are probably asking yourself “while such a difference in property taxes not only between local area municipalities but also the City of Toronto when they all have an identical assessed value?” That’s a great question and I will answer that in my next post. In the meantime please free to Contact Me if you have questions on property taxes or regarding any other real estate related topics. I am always here to help and or to direct you to the appropriate source such as a lawyer and an accountant if I can’t.