Real Estate

Property Taxes Assesments

  • Last Updated:
  • Apr 10th, 2019 3:52 pm
Deal Addict
Sep 12, 2017
2483 posts
284 upvotes

Property Taxes Assesments

I'm closing on a new build home this week. The mill rate for my municipality is 1.012865%, bought the house for $569,900, so doing the math by multiplying the two numbers is equal to $5,763 tax for the year. If someone bought the house at phase one and house was bought for $369,900, will they be paying less tax for the same house? I'm wondering how often homes get reassessed? Or is it simply based of purchase price?
Last edited by reggyDeal on Dec 18th, 2017 12:29 pm, edited 1 time in total.
8 replies
Deal Addict
Mar 14, 2006
4409 posts
819 upvotes
your assessment should be 'less' than what you paid for especially for a new built.
you will probably be looking at low-mid 4000s.
Deal Fanatic
Nov 24, 2013
6479 posts
3344 upvotes
Kingston, ON
Property taxes are not directly based off of purchase price. They're based off assessed value, which in Ontario is set by the Municipal Property Assessment Corporation (MPAC). They'll come in a few months to do a visual assessment of the house and compare it to other similar homes in the area to come up with an assessed value. They'll send the value to you and your municipality, and the municipality will charge tax based on that assessment. It's usually lower than the purchase price, but I suppose there's always exceptions.

You do have rights to contest an assessment with MPAC if you feel it's too high. If you appeal and it's successful, MPAC will amend the value base with the municipality.
Deal Addict
Sep 12, 2017
2483 posts
284 upvotes
How often does MPAC make an appraisal, every time the house is sold? I assume you don't call them over if I'd finish my basement unless I want to pay more property tax?
Sr. Member
Dec 4, 2004
730 posts
729 upvotes
GTA
reggyDeal wrote: How often does MPAC make an appraisal, every time the house is sold? I assume you don't call them over if I'd finish my basement unless I want to pay more property tax?
Every 4 years. Last one was 2016 and applicable to taxes in 2017, 2018, 2019 and 2020. Next one will be 2020. The new assessed value is phased in over the 4 year period, so if you're assessed value in 2012 was $200k and your new assessed value is $300k in 2016, your taxes will based off of an assessed value of $225k in 2017, $250k in 2018, $275k in 2019 and $300k in 2020.
Deal Addict
Oct 29, 2010
4475 posts
811 upvotes
reggyDeal wrote: How often does MPAC make an appraisal, every time the house is sold? I assume you don't call them over if I'd finish my basement unless I want to pay more property tax?
As someone who moved into a new build in 2017, I can share some of my experiences with you.
I didn't buy directly from the builder as the owner who did flipped the townhouse and I bought it from them.
They bought it for around 650k from the builder and I later bought it from them for 950k after occupancy.

The builder charged the owners something like 2k in taxes based on some assumption of how much taxes are going to be, in the end they took those 2k from the previous owner and never paid that amount to the city.
Once I took possession of the house I received a letter that I owe the full amount for 2017 which wasn't 2k like the builder said but was actually 3k. Since they wanted the full amount it was clear that the builder never paid any money so I had to get my lawyer to get those 2k back from the previous owner as I credited those 2k when we closed.
Our closing was May 2017, they asked for around 3k by August or so which was suppose to be for the entire year.
In late October or early November we received a reassessment letter from MPAC saying the value of the house went up from 350k to 600k (give or take) and because of that we now owe another 2k, so total for the year is now 5k and we had to pay half in November and the other half in December.
I also know that one of my neighbors had the same issue only that they moved in earlier, so they received the same later in late October but because they are a corner unit and slightly bigger townhouse, they asked for an extra $4,500 so their total for the year became $6,500.

Anyway, when you owe them money and they believe you underpay, they are very quick to make that adjustment.
To be honest, MPAC seems like a joke to me, my land was a farm land 1-2 years ago and based on MPAC's math, my 26x100 lot was worth about 550k before. If that was the case, whoever owned this farm land was probably paying millions of dollars in taxes on some farm land which doesn't make sense.
Jr. Member
Jan 11, 2017
111 posts
9 upvotes
I know its an old thread, but looking for answer.
If I build a legal basement apartment - multi dwelling. Will I have to go through the MPAC assessment ? Will they increase the property price ? How much increase in property price shall I expect with a legal basement apartment?
Deal Guru
User avatar
Feb 2, 2014
11233 posts
3351 upvotes
Toronto
Once permits are issued, the city will send the information to MPAC. MPAC will then tack the value added of the basement apartment to assessment.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Expert
Feb 22, 2011
16521 posts
21871 upvotes
Toronto
reggyDeal wrote: How often does MPAC make an appraisal, every time the house is sold? I assume you don't call them over if I'd finish my basement unless I want to pay more property tax?
MPAC is just allocating taxes on a proportional basis, the "appraisal" doesn't really speak to the market value. A good indication will be looking at a comparable cost property in the same neighborhood or area.

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