Why is My Property Tax so High?

If you are new to being a homeowner, there are many things to discover. One thing that you may be questioning is why your property tax is so high. This is a legitimate question that many homeowners ask themselves. There can be many different factors that can make your property tax high.

What is Property Tax?

Property tax is a tax that is charged to every homeowner. The amount that every homeowner pays will vary, depending on the value of their house. The money from your property taxes is put towards many things, including education and public facilities. Therefore, it is essential to pay your property taxes to ensure that you do not face any tax records, which can cause future problems when selling your house.

Factors that Increase Your Property Tax

As mentioned previously, many things can raise your property taxes. First, we will dive into the main factors that can raise your taxes.

Location

This is a huge key factor, which will determine if your property tax will be high. Numerous neighbourhoods have excellent features, such as being close to a city’s downtown or by the waterfront. Features like this add to a property’s value and price. The higher the value of your house, the higher your property taxes will be. So if you own a home in a nice area, do not be shocked if your taxes are slightly higher than you expected. In Ontario, cities with the highest property tax rates include Windsor, Thunderbay, and Sault Ste Marie.

Age of the House

An important thing to keep in mind is the older the house, the more value it is. Therefore, older homes are overall more valuable and will be more expensive. However, they all have their unique features, and there are not many left, compared to new homes that are built. If you own an older house, consider your property tax to the age of your house for clarification.

House Size

Another aspect that can increase your property tax is the size of your house. The average house size for a single residence is 1520 square feet. If your home is larger than this average, then the property tax average will undoubtedly be higher. A principle to keep in mind is that the larger your house is, the larger your tax. So if you own a mansion, then higher property taxes is normal.

Home Improvements

This is a factor that many people do not consider. During 2020 and 2021, many people have been making home improvements to their homes. This not only makes a house look nicer, but it also raises the value of the house. Many people overlook that this can also increase their property taxes, as their value is going up. So if you have moved into a home where you have been doing some recent upgrades, expect your taxes to increase potentially.

How do I calculate my property tax?

Your property tax is established by taking your property’s value and multiplying it by the municipal tax rate. If you want to confirm that you are paying the proper amount on your property taxes yourself, you can calculate it. If you go on the internet at Wowa.ca, you can easily calculate your property tax with their provided tax calculator.

Many aspects can raise your property tax higher than average. Yet if you establish precisely what is increasing your tax, you can feel more assured.

If you have any questions about your property tax, please contact me!

Sources

-Ontario Ministry of Finance (2021). Property Tax. Retrieved fromhttps://www.fin.gov.on.ca/en/tax/pt/index.html#:~:text=Property%20tax%20is%20a%20levy,are%20established%20by%20each%20municipality.

-Wong, Kristin (2018). 6 Things That Might Make Your Property Taxes Go Up. Clever. Retrieved from https://www.architecturaldigest.com/story/property-taxes-what-makes-them-go-up

-Zoocasa (2019). Ontario Property Tax Rates: What You Need to Know When Buying a Home. Retrieved from https://www.zoocasa.com/blog/ontario-property-tax-rates-faq/