Lower Toronto Property Taxes Appeal to Buyers, Find Out Why!

December 6th, 2007 Categories: Home Buyers, News Wire

If you own a home in the City of Toronto, you pay the lowest property taxes of any city in southern Ontario. As a Toronto real estate agent who often writes deals in outlying regions, I see firsthand the shock my buyers experience when they realize the amount of taxes they will be required to pay.

Even if the rumblings of a proposed 10% to 12% jump in property taxes come about, we would still be paying less. And there are no guarantees other cities will not increase their property taxes. The idea that tax increases will not happen outside the City of Toronto is a fantasy.

And I suspect that city councils throughout the province kept a close watch on what it took to push the Toronto Muncipal Land Transfer Tax through. Every city needs more money to offset the provincial downloading, not just Toronto.

Crunching Some Tax Apples

Let’s compare tax apples to tax apples. What would it cost to buy a $475,000 house in Toronto and pay the full Toronto Land Transfer Tax as opposed to buying the $475,000 house in Pickering?

To buy the $475,000 house in Toronto, you would be required to pay $5,225 for the Toronto Land Transfer Tax plus approximately $4,051 for annual property taxes (assuming 2007 mill rate and a current value assessment of $475,000). This adds up to approximately $9,276 in taxes.

To buy the $475,000 house in Pickering, you would not be paying a municipal land transfer tax (yet), but your annual property taxes (assuming the same as above) work out to approximately $6,425. That’s about $2,374 more a year.

Is It Just One More Hurdle to Jump?

It’s easy to see that by buying in Toronto, and paying less in annual property taxes, you will recoup the Toronto Land Transfer Tax in just over two years. I suspect that many move-up buyers will see this tax as one more expense that must be paid in order to live where they want.