These are the cities with the highest and lowest property taxes in Canada – National

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Buying a home in Canada briefly became a little less difficult at the end of last year, but that small gain has already vanished as rising interest rates erase the impact of a declining housing, according to RBC.

But home prices and borrowing costs aren’t all buyers and homeowners face. There are also, of course, taxes.

READ MORE: Welcome to the era of fixed house prices

Depending on where you live in Canada, land transfer taxes and property taxes might be enough to put your dream home out of your reach.

So how does the homeownership tax burden compare across the country?

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Property transfer taxes and costs

Not all governments call it a tax – in Alberta and Saskatchewan it’s a fee – but all provinces charge it when real estate changes hands. It’s a levy that buyers have to pay in cash – they can’t add it to the mortgage – and on top of their closing costs.

But depending on tax rates and local property values, what Canadians end up paying can range from a few hundred to tens of thousands of dollars.

And the LTT is bad news for buyers in Canada’s two most expensive markets.

READ MORE: Why Aren’t Home Prices Going Down? Home sellers won’t have it

In Vancouver, where housing affordability is at “crisis levels,” according to RBC, the tax adds a whopping $ 20,000 to the cost of buying an average price home worth $ 1.1 million. dollars, according to calculations by the Zoocasa real estate website.

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And in Toronto, where buyers face both a provincial and municipal LTT, the tally is nearly $ 17,000 based on an average home price of just over $ 800,000. And that’s almost $ 8,500 in rebates for first-time home buyers. Regular buyers face a tax bill of over $ 25,000.

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That can add years to the time it takes for buyers in this market to save the money they need to finally afford a home, Penelope Graham, editor of Zoocasa. noted in the report.

This is in stark contrast to Calgary and Edmonton, where first-time home buyers and regular buyers would pay less than $ 300 for a property valued at $ 471,000 and $ 387,000, respectively.

And in London and Windsor, Ontario. average house prices are still below the threshold of $ 368,333 at which first-time homebuyers are spared from the LTT.

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Here’s how Canada’s major cities stack up, according to Zoocasa:

Property taxes

While land transfer tax can force some buyers to postpone the purchase of a home, property taxes are forever. It’s a recurring bill that you will have to deal with for as long as you own a home.

The amount you will have to pay each year depends on your municipality, which assesses both the value of your property and the tax rate, usually between 0.5% and 2.5%, once a year. Intuitively, this would imply that if the value of your home were to drop in a downturn, so would your tax bill.

In practice, however, municipal governments tend to adjust property tax rates in response to changes in house prices in order to keep income inflows stable.

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READ MORE: Here’s the Income You Need to Pass the Mortgage Stress Test Across Canada

Between 2016 and 2017, for example, Calgary and Edmonton saw the largest increases in property tax rates, as municipalities tried to offset the impact of falling home prices, according to the 2017 Canadian Property Tax Rate report. Benchmark of AltusGroup, a real estate services agency. provider.

Vancouver and Toronto, on the other hand, have seen residential tax rate cuts for 14 and 9 consecutive years, respectively, starting in 2017, according to the study.

Indeed, Vancouver has the lowest residential property tax rate among Canada’s largest cities, with the city charging just $ 2.55 for every $ 1,000 of assessed property value. Toronto comes third from the bottom, with a rate of just $ 6.62 above Calgary’s $ 6.50 for every $ 1,000 of value.

Winnipeg, Halifax and Ottawa, on the other hand, posted the highest rates, at $ 12.15, $ 11.98 and $ 10.68 for every $ 1,000, respectively.

The actual tax burden faced by homeowners also depends on local tax breaks. But if it is any consolation to Vancouverites, the property tax on a $ 1.1 million property in their city would have been about $ 2,800 – and that’s about $ 1,000 less than a Winnipegger. would have paid for a house of $ 300,000.

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