Property taxes are annual fees that Canadian homeowners pay to their local municipality to fund essential community services such as schools, roads, policing, fire protection, parks, and waste collection. The amount you pay depends on two factors: the assessed value of your home (set by your province’s property assessment authority) and the local tax rate set by your municipality.
How Property Taxes Are Calculated
- Municipal tax rate: Your city or town applies a tax rate (called a “mill rate”) to that value.
- Education tax: A portion also goes to fund provincial education.
Formula example:
Assessed Value of Home × Local Tax Rate = Annual Property Taxes
How to Pay Property Taxes in Canada
Homeowners usually have two main options:
- Direct to the municipality – You can pay property taxes directly to your city through online banking, in-person payments, or by setting up monthly installments.
- Through your mortgage lender – Many lenders collect property taxes as part of your mortgage payment and forward them to the municipality on your behalf. This is called a “tax account” or “escrow account.”
Key Takeaways
- Property taxes are mandatory and vary by city and province.
- They fund vital community services and education.
- You can pay directly to your municipality or include them in your mortgage payments.