If you're thinking about purchasing real estate in Toronto and have already surveyed the real estate landscape by setting your sights on some houses for sale that intrigue you, one thing you've probably come to notice quite quickly is that there are plenty of high priced real estate properties for sale in Toronto. While the city isn't the only city in the world with some pricey real estate properties for sale on the market it is something that should give you some pause for thought.
The reason being is that the more you pay for a property, be it in popular Lawrence Park (which TheStar.com votes as the best hood to live in) or a house in Oakville, the more you'll probably have to pay in property taxes. Ah, yes, the good ole dreaded property tax situation. Nobody likes paying property taxes but it's all a part of the home buying game and if you don't budget yourself accordingly when shopping for real estate you might come to find too late that a particular property you wanted could be out of your price range.
It can be easy ignoring property taxes when buying real estate. You're concerned with listing prices, real estate agent commission fees, and not to mention talking mortgage rates with a qualified mortgage broker in Toronto. All of that can add up and lead to you forgetting one very important part of the home owing equation. Luckily for you though we've got your back and have some information about property taxes in Toronto that should help you out during your home buying journey.
The way property taxes work in the city is that at the end of the year you are asked to pay a certain property tax amount that is based on the type of real estate property you own and the assessed value of said property. The total property tax rate is a combination of the City of Toronto's property tax rate combined and its education tax rate. Each year the property tax rate is subject to change and for 2012 the total property tax rate for a residential property in Toronto was 0.7711981%.
So, as an example, say you own an industrial space in Toronto that's worth $400,000. You would take that value and multiply it by the tax rate. When you do that the estimated property tax sum for that particular property would be $3,084.80 and that would be the property tax bill for that property for 2012. Most property tax bills in Toronto should be received by the homeowner no later than June of that year and can be paid either in one shot, two installments or six installments.
You can see how important it is to factor in property taxes when shopping for real estate, as you'll be paying property taxes each year on your property. In some situations, such as when you use part of your home for earning income, it can be possible to deduct a portion of your tax bill when you file your income taxes; however, it's not always a black and white issue, so it's definitely something to discuss with a qualified tax accountant. While it might not make you forgo purchasing a particular home, it will make you realize how much money you should have saved up before looking at available properties.
To help you determine your property tax fees for the year you can use a calculator like this one.