Property tax is based on the value of your property, including condo property tax. Before you purchase your dream house, you need to have a clear idea of the additional fees so you won’t be caught off guard. Our team is here to answer your questions and concerns about condo taxes to give you a better understanding.
What is a Condo Property Tax?
Condo property tax is a fee you need to pay once a year. The government uses this fee to maintain the community and its surroundings including public spaces. For a condo, you will see this fee reflected in the garbage services, amenities maintenance, sanitation, and more.
Condo taxes or any sort of property taxes may be foreign to you if you have never purchased a residence. It is an inevitable part of owning a home and will mirror the value of your condo. For condos, one of the greatest influencers of the amount is the location.
Calculation of Condo Property Taxes
How exactly are these taxes calculated?
To know exactly where your money is going and making sure you aren’t overcharged, we’ll take a look at how these taxes are determined.
It’s not only the value of your home but also the surrounding communities. In a big city like Toronto, for example, its real estate can be sky high but the taxes are lower compared to surrounding areas such as Oshawa, the tax rates  are much higher due to the developing communities.
How much should you be paying for your condo? Take the value of your property and multiply it by the tax rate to reach the final number. How the surrounding land is being used will also impact the tax rate. For example, if you are in a developing area and upcoming location with schools and residential homes being built, expect a much higher rate.
When choosing your home, it is important to consider the location. You research the municipality property assessment online to decide which area best fits your budget.
Other factors that contribute to the tax rate include the age of the property, development being undertaken in the community, the size, the construction, and of course, the location.
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Costs of Condo Property Tax
This tax along with housing property taxes is not set in stone. Every four years or so, the MPAC or Municipal Property Assessment Corporation will conduct an assessment of property value for all of Toronto. Their final assessment multiplied by the property tax rate proposed for the year is what you will need to pay.
Keep in mind that the MPAC’s assessment of your property value can differ greatly from the market value. For example, if you live in the Richmond Hill area where property prices are hefty, your calculations will look like this:
Property value of 1,000,000 x Richmond Hill’s final tax rate (for 2020) 0.653108% = $6531
Other Condo Taxes
Property taxes are mainly made up of two main categories: municipal tax and education tax. The latter is the same throughout the province of Ontario. You may find other taxes that cities can add, which include a city-building fun that is added in Toronto and a land transfer tax.
Land transfer tax is paid by everyone who is a future property owner. It’s the fee to take ownership of the land and should be paid within 30 days after the transaction.
You may also see some special charges on your bill such as areaway charges, building charges, fire alarm charges, and local improvement charges. These are usually short-term fees that can be added depending on the situation of the surrounding areas.
Value of a Condo
The market price and final assessment of the MPAC can differ significantly, so you may want to get an idea of how the evaluation is done. Our experts will take you through some of the determining factors when valuing a property.
You can find a rough outline by going online, typing in your address and answering a few questions to get a brief summary. Vital characteristics of your condo that will influence the price include the story, because buyers will shell out more for a higher floor to get a better view.
The layout is also important. Depending on how your condo is designed, the more spacious it is, the higher the value. Not only will the height of your condo affect the price but the view as well. A penthouse suite that faces an alleyway will be less valuable than one that has a waterfront view.
Which direction does your condo face? Our experts say that something as simple as the lighting you get during the day will also impact the value. Lastly, if you have a corner condo, it will usually be worth more as well due to the extra lighting and privacy.
(If you want to know the cost of building a condo, you can also check our page about all related cost in terms of building condo here)
Do condo HOA fees include property taxes?
No, unfortunately, HOA fees do not include property taxes. HOA fees are solely for the upkeep and maintenance of the building and public spaces while property taxes are taken by the municipal government. They are two separate payments as one goes to the municipal government and the other is paid to the management company.
How much is property tax in Toronto condo?
The property tax rate for a condo development in Toronto is around 0.66%. This number could increase and decrease depending on a variety of factors including the property value of your neighborhood, and the passing of different laws, ongoing services, and maintenance in the community.
When considering the condo property tax you need to pay every year, the value of your property is a big influencer. However, most larger and more developed cities like Toronto will see lower tax rates but the government will have building fund levies added and other extra costs you will need to consider. Property taxes are inevitable and unavoidable regardless if you live on the property or not. Whether you are renting out your condo or just using it as a vacation home, you will need to pay property taxes every year.
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