How to pay property tax in Toronto

| Homeowners

Property ownership comes with a lot of additional costs, including a fun little thing called property tax. We thought we’d share some insights into property taxes, including how they’re calculated, when they’re due, and tips on how to pay property taxes in Toronto.

What are City of Toronto Property Taxes?

Toronto homeowners pay property taxes to cover the costs of Toronto services, including:

  • Police, Fire and Paramedic Services
  • Public transit
  • Public education
  • Parks, forestry, and recreation maintenance
  • Road maintenance
  • Major infrastructure projects, such as City-run housing initiatives

Is There a Property Tax Lookup?

Yes. As a new property owner, when you buy a home, you’ll receive a property tax statement. Along with your statement, the City provides your customer account number to access your information using the online Property Tax Lookup. The information available through your account includes a balance of your property tax bill, BUT the City stresses that information is not always accurate. The best way to ensure accuracy is to keep track of your bill payments or request confirmed certificates from the City.

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How Much is Property Tax in Toronto?

In Toronto, your property taxes are based on the Municipal Property Assessment Corporation’s (MPAC) most current assessment of your property. The assessments are made every four years, and your property taxes are adjusted once your property’s value is confirmed. The applicable tax rate is based on a percentage and determines your annual property tax amount based on the following:

  • Municipal Tax Rate set by the City of Toronto to cover local services.
  • Education Tax Rate set by the Province of Ontario to fund the public education system.
  • City Building Fund Levy used for major infrastructure projects.

On top of the assessment every four years, the tax rate percentages can change annually to manage the City’s changing budget and funding needs.

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How are Property Taxes Calculated in Toronto?

There are two calculations made in the year:

  1. Interim Property Tax Bill:
    • Mailed out in January
    • Calculated at 50 per cent of the previous year’s total property tax
    • Due on the first business day of March, April and May (The exact due dates for the year are posted here)
    • Homeowners with mortgage-paid property taxes don’t receive an Interim Property Tax Bill as they’re sent directly to the mortgage lender
  2. Final Property Tax Bill:
    • Mailed out in May
    • Calculated using the MPAC property assessment value multiplied by the current tax rate (Assessment x Rate = Total Property Tax)
    • Includes the municipal and education rate
    • Due the first business day of July, August and September (The exact due dates for the year are posted here)

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Why Would I Pay Property Tax in Toronto Through My Mortgage Lender?

In Toronto, homeowners can choose to pay property taxes directly to the City or, in many cases, through their mortgage lender. Paying through the lender can simplify budgeting by rolling everything into one payment. Sometimes, especially for buyers with smaller down payments, lenders may require property taxes to be collected this way. This protects the lender, since unpaid property taxes can lead to a lien on the home, which takes priority over the mortgage.

How Do I Get a Copy of Property Tax Bills in Toronto?

As mentioned above, the City issues your Interim Property Tax Bill and the Final Property Tax Bills via mail. If for some reason you need a copy, the online Property Tax Lookup provides your latest property tax bill. If you can’t access your account, you can also request a reprint for a fee applied to your tax account.

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How Do I Pay Property Tax in Toronto?

There are several ways to pay your property taxes, including:

  • Pre-authorized debited to your bank account of choice either monthly or in six installments
  • Online banking through your online banking platform of choice
  • In-person payments at designated financial institutions, the City Hall, or the Civic Centre in your municipality

What Happens For Late Property Tax Payments in Toronto?

Late payments are charged interest at a rate of 1.25 per cent on the first day, and on the first day of each additional month the taxes aren’t paid. Pre-authorized payments help avoid additional charges.

We can tell you how much property taxes add to your monthly expenses so you never buy a home you can’t afford.

Whether buying or selling a home in the GTA, make sure you’re working with the best Toronto real estate team. Here at The Christine Cowern Team, we’re always happy to share our expert insight. Give us a call at 416.291.7372 or email us at hello@christinecowern.com today.