Key takeaways
- Property tax = assessed value × total residential tax rate
- The total rate combines the city rate, an education (school) rate and sometimes other levies
- Assessed value comes from a provincial agency, such as MPAC in Ontario or BC Assessment, and is often below the market price
- Rates change every year and differ a lot between cities
- Renters do not pay property tax directly, but it is part of the rent
How property tax is calculated
Every city sets a tax rate for each type of property. For homes, your bill is:
Property tax = assessed value × total residential tax rate
The total rate is usually the city’s own rate plus an education rate set by the province, and sometimes other levies (for example regional, transit or library levies). Cities publish rates in different ways: as a percentage, in “mills” (dollars per $1,000) or per $100 of value.
- 0.75% = $7.50 per $1,000 = 7.5 mills = $0.75 per $100
Rates are set once a year, usually in the spring. Most cities send an interim bill early in the year and a final bill once the new rate is set.
Who sets the assessed value?
- Ontario: the Municipal Property Assessment Corporation (MPAC). Values have been based on a 2016 valuation date for several years, so they are often well below today’s prices.
- British Columbia: BC Assessment sends a notice every January, based on value on July 1 of the year before.
- Alberta: each municipality assesses property every year, based on market value on July 1 of the year before.
- Quebec: each municipality has a property assessment roll, updated every 3 years.
- Other provinces: a provincial agency or the municipality sets the value.
If you think your assessment is too high, you can ask for a review or appeal by the deadline on your notice.
Where to find your city’s rate
Search your city’s website for “property tax rates” and the current year, and use the total residential rate. The rate in big cities with high home prices is often lower than in smaller places, but the bill can still be higher because homes are worth more. Compare cities with our guides to Toronto, Vancouver, Calgary and Ottawa.
Your bill may also include charges that are not based on value, such as water, waste collection or local improvement charges.
Worked example
Your home is assessed at $600,000 and your city’s total residential rate is 0.75%.
- Yearly property tax: $600,000 × 0.75% = $4,500
- Monthly: $4,500 ÷ 12 = $375
If your lender collects property tax with your mortgage payment, it adds about $375 to each monthly payment (or about $173 to each bi-weekly payment).
Ways to lower your bill
- Home owner grants: BC gives a yearly grant to owners who live in their home, with a higher amount for seniors and people with disabilities. Some other provinces and cities have similar credits.
- Tax deferral: some provinces let seniors or families with children defer property tax.
- Low-income tax credits: Ontario’s Energy and Property Tax Credit can help renters and owners with low income. You apply on your income tax return.
Plan for property tax when you compare buying with renting: try the rent vs buy calculator and the mortgage affordability calculator.