If you own a property in Canada, you may be wondering how much you will have to pay in property taxes in 2024. Property taxes are levied by different levels of government to fund various public services and infrastructure. In this article, we will explain how property taxes work in Canada, what are the major changes expected in 2024, and how you can estimate your potential property tax costs.
Understanding Property Taxes in Canada for 2024
Property taxes are calculated based on the assessed value of your property and the tax rate set by the government. There are three levels of government that can impose property taxes in Canada: municipal, provincial, and federal.
Municipal property taxes
Municipal property taxes are the most common and significant type of property taxes in Canada. They are charged by the local municipality where your property is located, and they vary depending on the services and amenities provided by the municipality. Municipal property taxes typically cover costs such as roads, parks, libraries, fire and police services, public transit, and waste management.
Provincial property taxes
Provincial property taxes are charged by some provinces in addition to municipal property taxes. They are usually based on a percentage of the assessed value of your property, and they are used to fund provincial programs and services such as education, health care, and social services. Provincial property taxes are applicable in British Columbia, Manitoba, Quebec, and New Brunswick.
Federal property taxes
Federal property taxes are rare and only apply to certain types of properties in Canada. They are charged by the federal government and are used to fund national programs and services such as defence, security, and foreign affairs. Federal property taxes are applicable to properties owned by non-residents, properties located on federal lands, and properties used for certain purposes such as airports, railways, and harbours.
Major Property Tax Increases Expected in 2024
According to the latest projections, property taxes are expected to increase significantly in 2024 across Canada. This is mainly due to the following factors:
- The COVID-19 pandemic has caused a severe economic downturn and reduced the revenues of governments at all levels. To cope with the fiscal challenges and support the recovery, governments may need to raise property taxes to cover their expenses and debts.
- The demand for public services and infrastructure has increased due to the population growth, urbanization, and climate change. To meet the needs of the citizens and the environment, governments may need to invest more in areas such as health care, education, transportation, and green energy.
- The property values have risen sharply in many parts of Canada due to the low interest rates, limited supply, and high demand. As a result, the assessed values of properties have increased, which means higher property taxes for the owners.
Impact on Toronto
Toronto is expected to face one of the highest property tax increases in 2024, as the city struggles to balance its budget and address its infrastructure gap. According to the city’s chief financial officer, the property tax rate may need to increase by 8% in 2024, which is four times the inflation rate. This means that the average homeowner in Toronto may have to pay an extra $400 in property taxes in 2024.
Impact on other municipalities in Canada
Other municipalities in Canada are also likely to experience significant property tax increases in 2024, although the exact amount may vary depending on the local circumstances and decisions. For example, Vancouver may see a property tax increase of 5%, Montreal may see a property tax increase of 4%, and Calgary may see a property tax increase of 3%.
How to Calculate Your Potential Property Tax Costs
To estimate your potential property tax costs in 2024, you will need to consider two factors: the assessed value of your property and the tax rate applied by the government.
Considerations for property assessments
Property assessments are conducted by independent agencies that evaluate the market value of your property based on various criteria such as location, size, age, condition, and features. Property assessments are usually updated every year or every few years, depending on the province. You can find your property assessment on your property tax bill or online on the website of your assessment agency.
Understanding tax rates and brackets
Tax rates are determined by the government and are expressed as a percentage or a dollar amount per $1,000 of assessed value. Tax rates may vary depending on the type, class, and use of your property. Tax rates may also change every year, depending on the budget and priorities of the government. You can find the tax rates for your property on your property tax bill or online on the website of your municipality or province.
To calculate your property tax, you will need to multiply your assessed value by the tax rate. However, some provinces have tax brackets that apply different tax rates to different portions of your assessed value. For example, in British Columbia, the first $200,000 of your assessed value is taxed at 0.24%, the next $200,000 is taxed at 0.35%, and the remaining amount is taxed at 0.45%. You can find the tax brackets for your property on your property tax bill or online on the website of your province.
Potential tax relief measures
Some governments offer tax relief measures to help certain property owners reduce their property tax burden. These may include exemptions, deferrals, rebates, credits, or grants. Tax relief measures may be available for property owners who are seniors, low-income, disabled, veterans, farmers, or first-time home buyers. You can find out if you are eligible for any tax relief measures on your property tax bill or online on the website of your municipality or province.
Property taxes are an important source of revenue for governments in Canada, but they can also be a significant expense for property owners. In 2024, property taxes are expected to increase substantially due to the economic and social impacts of the COVID-19 pandemic, the rising demand for public services and infrastructure, and the soaring property values. To calculate your potential property tax costs in 2024, you will need to consider your property assessment, the tax rate and brackets, and the tax relief measures. By doing so, you can plan ahead and budget accordingly for your property tax payments.