In Canada, discussions about property taxes stir lively controversies in cities and the countryside. Urban and rural residents often accuse each other of dodging their fiscal responsibilities, squabbling endlessly about tax rates on humble homes. In reality, beyond these feuds lies an essential topic decidedly absent from most homebuyers’ knowledge: property taxes and their wallet-piercing potential.
Making plans for yearly payments on property taxes is equally important as looking into mortgage interest or calculating your closing costs. This in-depth handbook will take you through all of the ins and outs of property taxes in Canada.
What You Can Anticipate About Property Taxes
When it comes to property taxes, there are five important expectations you should have:
- Confirm the rate in your specific region.
If you want to find out the property tax rate for your district, just visit the website of your local council or government. Most local government websites have a calculator and a table showing all the tax rates for different kinds of property. They will be able to give you a sketch of how much you will be paying. This will be based on the Actual Value Assessment of the property. And don’t worry: you don’t have to work that out for yourself. The local government has already done it for you.
- The Process of Paying Your Property Taxes
Cities and towns have streamlined the process for paying property tax. They offer different ways for you to pay.
- Internet Banking
- Banking conducted by telephone
- Automated Teller Machine (ATM)
- Physically present
- Payment by check (where applicable)
Frequently, property taxes are combined with mortgage payments and then paid out to the local government by your lender.
What benefits come with paying your property taxes?
Every province and municipality utilizes the income received from property tax for varying purposes. To illustrate, in the province of Ontario, the resident landowners pay recurring property tax that caters to the needs of public education, infrastructure, waste management, snow clearance, and further social engineering services such as maintaining the police force, and fire brigades, and providing ambulatory emergency services.
Consequences of Nonpayment
Fees are charged on unpaid taxes starting at 1.25 percent per month. If still unpaid after several months, the collection process starts, which could lead to a lien against your home or land. And some governments, after some years of arrears, will register a Tax Arrears Certificate even if it puts it on the sale of your property.
Is it Possible For You To Pay Property Taxes?
In finding a new place to buy a house in Canada, it is imperative to weigh property tax obligations conjoined with a host of other budgetary considerations, including sales price, mortgage rate, interest, fees, and utilities. Awareness of your municipality’s property tax rate can help in approximating the fiscal impact of habitation. For instance, in Toronto, property tax percentages are pegged at 0.61%. Consequently, an abode valued at $1 million carries with it a $6,100 yearly tax implication. Such expense should unquestionably be incorporated into a prospective homeowner’s fiscal schematics, not to mention other outlays like land transfer duties, which can be quite onerous in some necks of the woods.
Getting Ready for Possible Property Tax Increases
Amid the aftermath of the COVID-19 outbreak, governmental bodies on both regional and local levels are eager to find alternative methods of income to restore their depleted funds, combat fiscal shortcomings, and alleviate debt loads. Some of these same entities, such as Nova Scotia, have passed a novel tax upon persons who live somewhere else but own land in their provinces.
However, some policymakers, such as those in Toronto, have come under increased pressure to embellish existing property rates. Now, because the cost of living remains high all across Canada and the property market continues to rise, there’s a good chance that property tax rates will be elevated as a measure taken by fiscal bodies during the course of the annual budget.
The Importance of an Experienced Realtor
When looking for a home and understanding the financial obligations and burden on you, it’s very crucial to seek out the services of an experienced real estate agent/agency. One of the top real estate agencies you can turn to is Rivers Real Estate. They are familiar with the local tax environment and can give you vital information to help your home-buying choices.
Potential homebuyers need to understand the nature of property taxes when considering a home purchase. The firm values education and is resolute in its quest to ensure its clients can factor this unsurprisingly expensive cost into their overall budget to prevent any unexpected surprises. By employing a Rivers Real Estate Agent, you gain access to the information and proficiency imperative for the rapid planning of your annual property tax duties.
They will escort you to estimate your property taxes, make seasonal payment choices, and recognize the facilities and privileges that your taxes support. Their agents will guard you against potential changes to the tax rates in your sector to make sure you are ever ready.
