THUNDER BAY – Before buying a property, some checks are vital/essential. One of these checks is the cost of owning a property, of which Property Tax plays a central role.
Property taxes in Ontario vary according to the city, and this article will help you know more about how much a city like Thunder Bay charges as property tax when compared to other Ontario cities.
How to know your Property Tax
Confused about your home’s property tax? The market value of your property is not used by the municipalities to calculate your property tax. Instead, the Municipal Appraised Value of your home is being multiplied by the city property tax.
The Municipal Appraised Value of your property is evaluated by the Municipal Assessment Corporation (MPAC) every four years and it doesn’t necessarily represent the property market value.
This assessment considers many factors, such as the lot size, the level of renovations done to the house, and whether or not it has a basement. The assessment also reflects the values of similar properties in the vicinity, as well as if the house has a pool and other special features.
MPAC assessed property values in Ontario in 2016 and the new assessment was due in 2020, but it was postponed by the Ontario Government due to Covid-19.
Similar to the other cities in Ontario, the tax due for Thunder Bay residents is calculated by multiplying the Thunder Bay final property tax rate for the year by the MPAC property assessed value.
Property Tax for $500,000 Assessed Home Value in Thunder Bay
The property tax of Ontario cities is relatively low in comparison to many other cities in Canada. Based on WOWA study of the property taxes of the cities, Thunder Bay and Windsor residents pay a lot more property tax compared to other Ontario cities. Thunder Bay’s Residential Property Tax is much higher than that of a lot of cities in Ontario.
For an MPAC value of $500,000, Thunder Bay residents pay $7,992. This is higher than that of many cities, bar Windsor.
The following table shows the Residential Property Tax Rate for these Ontario cities.
These figures are accurate as of August 2020.
Why is Thunder Bay Property Tax So High?
Low property prices and a small population are the primary reasons for the higher property tax rate in Thunder Bay.
Property taxes are collected to fund the municipal budget. High property values and a large supporting population in a jurisdiction would imply larger revenue from property taxes. Jurisdictions like Toronto & Markham, with surging property prices and a large population pool, can afford to keep property taxes low.
The average property price in Thunderbay is $277,000, which is one of the lowest among Ontario cities. Moreover, with a small population of about 100,000 the city has to maintain a relatively higher property tax rate to fund its budget.
While in percentage terms Thunder Bay residents are paying a higher property tax (percentage based) compared to other cities in Ontario, their absolute outgo is lower as the average property prices are low. This higher than average property tax rate is expected to remain the same as Thunder Bay is not a sought after immigration destination (a major driver of property prices). However, the Rural and Northern Immigration Pilot that seeks to encourage skilled workers to immigrate to Thunder Bay (and 10 other participating communities) can help in the long run.