Torontonians pay Lowest Property Tax Rate in Ontario

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by Zoocasa August 13, 2019 / No Comments

Toronto boasts one of the lowest property tax rates in Ontario, according to a recently released report by Zoocasa.

Zoocasa ranked 35 cities in the province and found that Torontonians are paying around 0.62% on their home’s assessed value in 2019. That translates to $6,148 on a million-dollar home, or just over $500 a month.

That’s cheaper than all surrounding cities, including to the west, in which would-be residents would pay 0.67% for Milton homes for sale. Prospective buyers would pay 1.34% for houses for sale in Oshawa to the east, and those purchasing houses for sale in Vaughan to the north would pay a slight premium for at 0.7%.

But why do municipal rates vary so widely? And why do cities that are so much smaller than Toronto have to pay so much more tax?

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Penelope Graham, managing editor of Zoocasa, says that “as a main purpose of property tax collection is to generate revenue for cities, individual city councils generally set it at a rate that will bring in sufficient cash to float their operating budgets. However, they have considerable flexibility on this; in Toronto, for instance, city council has purposely kept the residential tax rate below inflation as a promise to voters.”

Cities that are more expensive and dense, interestingly, are actually able to suppress their tax rate because they’re still earning enough revenue. The more properties in a city and the more expensive they are, the more tax city council is collecting, and that means they have scope to maintain rates.

Plus, the city charges a higher rate for businesses — double or more. So if a city is doing well economically and attracting corporations, then they can rely more on the revenue from the commercial sector without angering homeowners.

Toronto is lucky insofar as it doesn’t need to do much work to attract businesses — although some businesses will move to take advantage of a lower rate elsewhere, many are forced to operate in Ontario’s capital, and so just end up swallowing the higher rate.

Since Toronto has some of the most expensive homes in the province, homeowners usually end up spending more in tax, in absolute dollars, than anywhere else. Few could manage their monthly bills if property tax shot up to let’s say, Windsor rates.

Windsor has the highest rate in the province at 1.8% A home assessed at $1 million would be on the hook for a full $17,894 annually, or $1,491 a month. That’s practically another mortgage payment.

But since homes are so much more affordable in Windsor, regularly going for as little as $100,000 to $300,000, owners end up paying around just $372 a monthly (for a home assessed at $250,000).

Want to see what homeowners across Ontario pay in property taxes? Check out the full ranking in the infographic below.

Zoocasa.com is a leading real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.


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