Content of the article

While the average home prices continue to rise A recent study by real estate website Zoocasa.com across Canada found that other costs faced by homeowners vary greatly across the country and can impact the overall financial equation when buying a home.

Content of the article

Zoocasa’s report analyzed municipal property tax rates in 25 Canadian cities and highlighted where some savings could be made that aren’t necessarily reflected in home prices.

Content of the article

The study, which considered property tax rates for 2023, focused on the amount property tax a resident would pay for a home with median prices of $500,000 and $1,000,000.

“Property tax rates are based on an assessment of the home’s value and the property tax rate set by the local government,” the report said. “Those looking to buy a home in different cities need to be aware of how the local tax rate will affect them overall availability of housing.“

Despite skyrocketing prices, the cities of Vancouver, Abbotsford, Kelowna and Victoria – all in British Columbia – boasted property tax rates below 0.5 per cent, significantly lower than other major Canadian cities. For example, homeowners in Vancouver, despite facing a median home price of $1,188,000, would only have to pay $3,303 in property taxes annually. By contrast, Torontonians would face a much higher property tax bill of $7,969 for a similarly priced home.

Content of the article

Content of the article

Montreal’s property tax rate of 0.5305 percent also places it in the top five. But with a median home price of $519,200, Montrealers would pay just $2,754 in property taxes — the lowest amount on the list for a median-priced home. St. John’s, NL, followed closely behind, with homeowners paying $2,997 in property taxes on a $280,400 home.

Winnipeg has emerged as an outlier in terms of property tax rates. Although its median home price was less than half that of Vancouver and Toronto, its property tax rate of 2.64 percent far exceeded that of other cities analyzed. Homeowners in Winnipeg would pay a staggering $9,111 in taxes on a home valued at $344,600, the city’s median price. That amount is more than double what homeowners in cities like Edmonton, Quebec City, Calgary, Victoria and Kelowna would pay for an average-priced home.

Content of the article

Other cities with significantly high property tax rates included Sault Ste. Marie, Ont., where homeowners would pay $4,759 for a home with a median price of $276,600, thanks to a property tax rate of 1.720,655 percent. Charlottetown and Saint John, NB, followed with rates of 1.67 percent and 1.62 percent. However, with median home prices below $350,000, residents can expect to pay less than most Ontario cities.

Surprisingly, Guelph, Ont., ranked first for the highest property tax for an average-priced home. With a property tax rate of 1.23 percent and an average home price of $824,500, Guelph homeowners would pay $10,134 in property taxes annually. Burlington followed closely behind with a property tax rate of 0.86 and a median home price of $1,086,400, resulting in homeowners paying $9,359 in property taxes.

Content of the article

Patti Cosgarea, manager of public relations and content marketing at Zoocasa.com, urged potential homebuyers to be cautious and carefully evaluate the implications of these expenses on overall housing affordability.

“Many people think of property taxes as an afterthought,” Cosgarea said in an interview. “However, after 30 years, if someone has paid off the mortgage, they will still pay taxes on the property as long as they own it. So it’s an important factor to consider when looking at a property.”

Lower property taxes can be tempting, but the broader implications of any move must be considered.

Vancouver, for example, has seen an extended period of property tax cuts to partially offset rapidly escalating price increases, Cosgarea said. This policy had the unintended effect of making the region more attractive to foreign investors.

Content of the article

“Property taxes have recently gone down in Vancouver over the last few years,” Cosgarea said. “But that brought a lot of investors into Vancouver and the surrounding markets, which really made competition tougher and made things even more difficult (for buyers). It’s hard to say whether higher property taxes are a good thing or a bad thing. It really depends on the market and the conditions.”

• By e-mail: shcampbell@postmedia.com

Content of the article