How is property tax calculated on a home in Ontario?

Property tax in Ontario is calculated by multiplying the assessed value of your property by the municipal tax rate. The Municipal Property Assessment Corporation (MPAC), a provincial agency, assesses the value of every property in Ontario. These assessments are conducted on a province-wide reassessment cycle; between reassessments, the assessed value is phased in gradually to smooth out sudden changes.

The municipal tax rate (also called the mill rate) is set by your municipality and varies significantly from one city or township to another. It reflects local spending decisions and service levels. When you buy a home, your property tax is adjusted from the closing date — the statement of adjustments your lawyer prepares will show any prorated credit or charge for property taxes the seller has prepaid or left in arrears.

After you take title, the municipality sends tax notices to you directly. If you have a mortgage, your lender may require you to pre-pay property taxes monthly as part of your mortgage payment (a tax impound or tax account), and the lender remits the taxes on your behalf.