How Property Taxes Work on New Condos in Toronto
Toronto has one of the hottest condominium markets in the world, with a seemingly endless number of condo developments being built in this city of over 2.6 million people.
Condos are an appealing option for many people, from young professionals to those in retirement who choose to downsize. This maintenance free lifestyle is a great option for many, but it doesn’t come free. Condos have a number of fees and taxes that must be paid and it can become expensive in some cases.
Almost all condos have maintenance or condo fees that go toward paying for services like snow removal, landscaping and common area maintenance. In addition to these condo fees, you will also be required to pay property taxes, just like you would on a regular house.
How Much Are Property Taxes on a New Condo in Toronto?
The price you will pay for property taxes on a new condo in Toronto is determined by the assessed value of the condo itself. Because condos are generally less expensive (not in all cases) than single family homes, you can expect to pay less for property taxes. Using Toronto’s online property tax calculator, a condominium with an assessed value of $300,000 would have a property tax bill of just over $2300 per year.
There’s a Catch
Because brand new condos won’t likely be assessed by the city of Toronto right away, you may not get a tax bill for a little while. Usually your builder will be able to give you a pretty good idea of how much your tax bill will be estimated to be, but if the property doesn’t get assessed right away, you won’t get a tax bill until after an official assessment.
Don’t think you’re getting off with not paying taxes for a while though! You will owe property taxes from the date of closing until the city sends you a tax bill. If it takes 18 months to get assessed and get your first tax bill, you might open your mail and get a big surprise in the form of a tax bill for the entire period. The best defense in this case is to be setting aside money each month to cover the tax bill when it might come. Setting aside 1% to 1.25% of your purchase price for a property tax bill is a good guideline.
When Are Property Taxes Due?
Taxes come in two bills generally, which happen in January and June. You can choose to pay your taxes in installments or you may want your mortgage company to handle paying the taxes for you and they will just add it into your mortgage payment. For many, this is the easiest and most affordable option. If you choose not to pay your taxes in 2 installments, you may incur a small service charge for paying in installments.
Death & Taxes
The old saying is true; There are two things you can’t avoid: Death & Taxes. At least if you know what to expect and you keep in mind what you can afford, property taxes are just a part of owning your own property and are nothing to be too concerned about.
By: Kole on behalf of Chartered Accountant