Although it can seem as though property taxes in Toronto vary quite a bit, the tax rate for each property is actually the same and is set by city council during each year’s budget. There are two parts to the tax rate: the city tax rate which is set by the city and covers all municipal programs such as:
- Emergency services including firefighters, paramedics, and police;
- Parks and recreation;
- Transportation infrastructure including roads and highways;
- Public transit systems; and
- Social assistance programs.
The second portion of the property tax rate is the educational portion which is set by the Province of Ontario and covers education costs for the province. In 2013 the property tax rate was approximately 0.75% of property’s assessed value: 0.54% went to city costs while 0.21% went to education costs.
Residential tax rates are applied equally to all residential properties in Toronto regardless of location or type of dwelling. The tax paid on each property is calculated by multiplying the set property tax rate by the value of your home as determined by the Municipal Property Assessment Corporation. This value is determined by physical factors such as the age of the building, construction quality, finished, basements, garages, and pools as well as environmental factors such as location, lot size, traffic patterns, and surrounding green spaces. Due to the high competition for homes in Toronto, MPAC value is usually lower than market value for most homes and homeowners who feel that the value of their home has been overestimated are able to appeal the assessment.
Homeowners wishing to appeal their assessment can contact the Municipal Property Assessment Corporation by phone and ask to speak to a representative about their assessed value and request a list of the assessment on properties similar to yours. This service is free and is a great way to check if you are being taxed at roughly the same rates as comparable dwellings. If you still feel you are being overtaxed you can make a request for reconsideration in which you state your case in writing. This service is also free. Finally, if you have not had any luck getting reassessed you can make an appeal to the Assessment Review Board which is an independent tribunal. This is a more formal process which will require a fee of $75.