Property taxes are going up across Canada, and it’s not just an abstract number on your tax bill. It’s directly affecting what homes people can afford, how much they can borrow, and whether they can keep up with ownership costs. When your monthly property tax bill increases, your mortgage approval amount can shrink, and your long-term affordability picture changes. This article breaks down what’s causing property tax increases, how they impact both buyers and homeowners, and what you can do about it.
What’s Causing Property Taxes to Rise Across Canada?
Property taxes are based on two things: your property’s assessed value and the local tax rate (also called the mill rate). Both are increasing at the same time, which results in much higher bills for homeowners.
Municipal Budget Increases
Cities like Toronto, Vancouver, and Calgary are raising property taxes to cover growing costs for services like infrastructure, transit, and emergency services. Without additional help from federal or provincial governments, municipalities rely on homeowners to fill the gap.
Higher Property Assessments
Housing prices have surged in recent years. Now, new assessments are catching up to those values. Even if your local tax rate stays the same, a higher assessment means a higher tax bill.
Changes in Provincial Funding
Some provinces have shifted responsibilities to municipalities without increasing financial support. This forces local governments to make up the shortfall by increasing property taxes.
Local Inflation and Service Costs
Rising wages, fuel costs, and material expenses are making it more expensive for cities to maintain basic services. These costs are passed on to homeowners through higher taxes.
Why It Matters for Homebuyers and Owners
Rising property taxes increase the cost of homeownership in both obvious and hidden ways. For buyers, it reduces how much they can borrow, since lenders include taxes in their affordability calculations. For homeowners, higher annual taxes make it harder to manage monthly budgets and long-term financial plans.
A $500–$1,000 increase in annual taxes can reduce your mortgage eligibility by thousands of dollars. That could change the type of home you can afford or require you to look in a different neighbourhood.
Smart Ways to Deal with Property Tax Increases
You can’t stop tax increases, but you can plan around them. These practical tips will help you manage the impact:
Appeal Your Property’s Assessed Value
If your home’s assessment seems too high, you can appeal it. Gather recent sales data for similar homes and submit a formal request through your provincial or municipal property assessment office.
Ask for Accurate Property Tax Estimates When Buying
Before buying a home, ask for the most recent tax bill. Also check if the property has been recently reassessed. A home that looks affordable on paper could carry a much higher tax cost than expected.
Research Municipal Tax History Before Choosing a Neighbourhood
Some cities and towns have a stable history of tax rates, while others increase aggressively year over year. Review property tax trends and compare them as part of your decision-making process.
Check Eligibility for Tax Relief or Rebate Programs
Some cities and provinces offer property tax relief programs for seniors, low-income households, and first-time buyers. Look up your local municipality’s website to see if you qualify.
Include Tax Growth in Your Housing Budget
Set aside an extra $50–$100 per month to prepare for tax increases. Building this buffer into your budget will help you stay stable when new bills arrive.
Conclusion
Rising property taxes are affecting affordability in a very real way. They’re driven by higher assessments, growing municipal budgets, and shifts in provincial funding. As a result, both buyers and homeowners need to adjust their planning.
Start by checking how your property is assessed, planning for tax increases in your budget, and asking for the full tax picture when considering a new home. If you need help factoring taxes into your mortgage strategy, reach out to Pradip Maheshvari for expert, personalized guidance on protecting your affordability.
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