Toronto is a metropolitan city with over 2.79M residents and the population has increased by 2.3% (approx) over the last 5 years. Moreover, the prices of real estate units have increased by 7% from 2021. You are required to pay a property transfer tax in Toronto in case of the sale and purchase of property, even including the capital gains. The authority gives you the flexibility to make payments via both online and offline methods. Moreover, late tax payments will face penalties. In the blog, we will walk you through the elaboration of property tax along with its type, calculation procedure and payment methods and so on.
What is Property Tax?
The property tax is collected by Canadian provinces on the basis of the assessed value of your property. Every four years, the Municipal Assessment Corporation (MPAC) conducts a property evaluation in Ontario and submits the assessment report of each property. However, the assessed value may be different from the market valuation of the property. The net property transfer tax in Toronto amount of the year is calculated by multiplying the Toronto property tax rate by the MPAC property tax assessed value.
Types of Property Tax Along with Rates & Fees in Toronto
Refer to the tabulated data below to get a better understanding of the types of property along with the rates and total applicable fee on any property:
| Description | City Tax Rate | Education Tax Rate | City Building Fund | Total Tax Rate |
| Residential | 0.451291% | 0.153000% | 0.006722% | 0.611013% |
| Multi-Residential | 0.940384% | 0.153000% | 0.000000% | 1.093384% |
| New Multi-Residential | 0.451291% | 0.153000% | 0.006722% | 0.611013 % |
| Commercial General | 1.191313% | 0.880000% | 0.008873% | 2.080186% |
| Residual Commercial Band 1 | 1.108988% | 0.840110% | 0.008260% | 1.957358% |
| Residual Commercial Band 2 | 1.191313% | 0.902476% | 0.008873% | 2.102662% |
| Industrial | 1.179468% | 0.880000% | 0.005878% | 2.065346% |
| Pipelines | 0.868085% | 0.880000% | 0.012931% | 1.761016% |
| Farmlands | 0.112823% | 0.038250% | 0.001681% | 0.152754% |
| Managed Forests | 0.112823% | 0.038250% | 0.001681% | 0.152754% |
Procedure To Calculate Property Tax Bill in Toronto
The property tax of a property is calculated by multiplying the property’s assessed value of Municipal Property Assessment Corporation (MPAC) in the current year phased-in by the approved City Tax rate by Council along with ETC (Education Tax Rate) and CBFL (City Building Fund Levy) set by Ontario Government. For your reference, we created an example of how to calculate the property tax rate in Toronto manually.
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- Estimate taxes on residential property : Supposed value: CAD 700,000
- By using the formula : Property Tax will be equivalent to the Assessed Value multiplied by the Total Tax Rate
- Applying the formula in Expression : Property Tax = 700,000 x 0.611013%
The calculated property tax for a property with an assessed value of 700,000 will be equivalent to CAD 4277.09
Methods To Pay Property Tax in Toronto
The controlling and administrative authority of Canada offers the facility to pay property taxes via a freshly introduced financial transaction integrated service named My Toronto Pay. You can make real estate tax payments and also utility bills on this platform. The funds will be transferred electronically with no convenience fee. Debit card and credit card convenience fees won’t be charged by the industry.
In addition, you can also make Toronto real estate tax payments at the financial institution. You can make the payment via both offline and online banking. Other methods of payment include telephone banking, an automated teller machine or in-person.
Note: In order to avoid interest and penalties on the taxes, you should make the Toronto real estate tax payment before the due date.
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Procedure to Register and Make Financial Transactions via Online Banking
Refer to the information below to know more:
You are required to present your 21-digit assessment number of tax bill or real estate tax account statements. In the case of utility bills, you need the client number and a unique 20-digit account number from the utility bill.
Sign in to the official website of your financial institution and select from the below-mentioned as the payee:
| Name of Financial Institution | Payee Listing for Property Tax | Payee Listing for Utility Bills |
| BMO (Bank of Montreal) | Toronto, City of, Taxes | Toronto, City of, Utility |
|
National Bank |
City of Toronto Taxes | City of Toronto Utilities |
| RBC (Royal Bank of Canada) | Toronto City of – Taxes | Toronto Utility Bill (City) |
| CIBC (Canadian Imperial Bank of Commerce) | Toronto (City of) Property Tax | Toronto (City of) Utility Bill |
| TD Canada Trust | Toronto (City of) Property Taxes | Toronto (City of) Utility bill |
| Scotiabank | Toronto (City) Property Tax | Toronto (City) Utility bill |
Note: If your bank is not listed in the above-mentioned table then kindly contact your financial institution to get more information regarding online tax payment.
Capital Gains Tax in Canada
Capital gains are achieved on the sale of capital assets. Such assets are subject to capital gains tax as per the CRA (Canada Revenue Agency). Such assets include land parcels, shares, buildings, bonds and units of real estate investment trust units.
In addition, the capital gain inclusion rate is about 50% in Canada. You will have to include 50% of your capital gains as an earned income on your tax return. However, in the case of business and personal income, the inclusion rate is 100%, meaning you need to pay taxes on the total amount of your income.
Property Tax Lookup, Toronto
Almost every landlord and property owner have a registered Toronto real estate tax account in Toronto. If you don’t have one, we strongly suggest you get it done. You can get detailed information about your net property tax bill, future payments, payment history, payment program and schedule. Such registered accounts allow you to make financial transactions and you can also change your mailing address as per your preference.
Wrapping Up
property purchase and sale are taxable in Toronto, Canada. The controlling and administrative authorities provide several modes to make tax payments. Moreover, there are also numerous programs available to reduce the property tax in Toronto. However, different types of property have different tax rates and fees. The tax percentage on capital gains is different from the regular Toronto real estate tax. You can also calculate the net payable property tax with the help of the formula – Property tax will be equivalent to the assessed value multiplied by the total tax rate. Moreover, both offline and online modes are available to make Toronto property tax payments.
You May Also Read :
| Canada’s Income Tax Law | Income Tax in Canada |
| Guide on Real Estate Tax in Canada | Real Estate Tax in Canada |
| Overview of Speculation and Vacancy Tax | Speculation and Vacancy Tax |
| Choose Between TFSA vs RRSP | TFSA vs RRSP |
| Understand Fair Housing Act | Fair Housing Act |
Frequently Asked Question (FAQs)
In order to get a refund of land transfer tax, you need to submit a written request for a refund along with the required documentation and reason for refund. The documentation needs to be submitted under the IT Act via fax, mail or email.
In case of late property tax payment in Toronto, a penalty, interest or free charges will be imposed at a rate of 1.25% on the first day of default monthly as long as the taxes remain unpaid.
The interest rate is 1.25% which will be imposed on you if you don't pay the property tax bill on a monthly basis till the time you don’t clear the dues.
There are several programs available to reduce property taxes in Toronto such as the Water Rebate Program, Solid Waste Rebate Program, Property Tax Deferral Program, Property Tax Cancellation Program and so on. How can I request a refund on property tax?
What happens if I do not pay my property tax bill?
How much interest will be applied if I don't pay the property tax bill?
What other programs are available to reduce property taxes?
