Taking that first step on the real estate ladder can mean a steep learning curve when it comes to financial terms and how they affect you. One common area of confusion for those entering into the real estate market is the terms real estate and property taxes, which are often used interchangeably. So the real question is, are “real estate taxes” and “property taxes” the same?
In Short, Yes.
Real estate is a type of property tax.
Property tax is an annually billed tax paid on property owned by an individual or an entity. A property tax is one of three taxes that a household pays in Canada: property tax, sales tax and income tax.
While a property tax does apply to real estate, it can be applied to items other than real estate depending on your jurisdictions’ laws. These items can include larger possessions such as a car or boat. That said, the most common property tax is that which is paid on real estate, which is why the terms property tax and real estate tax can both be used in reference to the taxes paid on real estate.
However, the term real estate can’t be used in reference to property tax that is paid on items that are, of course, not real estate.
How Are Property Taxes Calculated?
When researching property taxes – what they are and how they will affect your finances – you may come across the terms mill rate and mill levy. These terms relate to how your real estate tax is calculated. The mill levy is the tax rate imposed on your property value, with one ‘mill’ representing one-tenth of one cent. This means that if real estate is valued at $400,000, the associated mill rate would be $400. This then applies to the overall value of the jurisdiction and helps determine how much revenue is needed in order to run necessary functions for the community. This revenue is then passed onto the property owners in the region.
Property taxes are calculated based on the value of the real estate property, both the land itself and any buildings on it. A property tax is a combined rate for both municipal and provincial property tax rates. The rate is determined based on the value of the property and whether the real estate falls under the residential or non-residential category.
After the initial appraisal of the property when purchased, an assessment by an official tax assessor visits the property every one to five years to update the value of the property and adjust the property (or real estate) taxes accordingly. The assessor can determine the property tax and value of the property through three methods: by performing a sales evaluation, following the cost method or estimating the amount of income that would be generated should the property be rented.
A good way to see if your property taxes are reasonable is by checking your tax card for comparable homes and their associated real estate taxes. Reducing your property taxes might be possible by looking for local and regional tax exemptions that apply to your property.
Factors That Can Affect Property Tax Rates
As a function of your local government, governmental changes can affect the rate of your property tax. Some of the common reasons why property tax rates may shift include:
Reductions in governmental revenue from grants or fees. Municipalities rely on the fees and grants allocated to them by provincial and federal governments. If the number of funds allocated changes, municipal property tax rates often shift accordingly to accommodate for this change.
Increases in municipal spending. The flip side of reduced municipal revenue is increased spending. Though opposite in most respects, this scenario also has an effect on the real estate tax rate (almost always an increase).
Failure to pay property taxes. In some municipalities, there are penalties associated with a property owner’s inability to pay the mandated taxes. As a result, the owner will often see an increase in the amount of property taxes required either as a function of a fixed penalty or an interest rate on the amount owing. Luckily, this factor is entirely in the hands of the property owner – as long as real estate taxes are paid completely and on time, additional expenses can be avoided.
Exempt properties. Some properties are deemed as exempt from the standard property tax rate for a variety of reasons, but largely because these properties have been deemed as valuable to society and further draw from the income of these properties would have a negative impact on these valuable contributors. Some examples of these properties could be farm residences, hospitals, churches and schools.
There are many other scenarios that could affect the property tax rate within a municipality.
What Is The Purpose of Property Taxes?
To a property owner, real estate taxes can seem like a fair amount of money if you don’t know exactly where it’s going. However, property taxes paid are another source of income for governmental bodies. The money is then redirected to the various needs throughout the area, such as the construction and maintenance of schools, city amenities, emergency services and more.
When you pay real estate taxes, you are contributing to your community services and infrastructure and, in turn, maintaining or even increasing the value of your home by creating a valuable community.
Staying Aware of Property Taxes
Once you have a strong understanding of property taxes, from how they are calculated to their purpose, the best way to ensure that you are paying the right amount is by staying educated. This means staying up to date with your municipalities changing rates and spending from year to year, finding out about any deductions you might be eligible for and having an active role in the assessment of your property.
Working with RE/MAX means having all the home and property owner resources at your fingertips. From buying and selling tips to housing market outlooks, you can make the most of your real estate decisions with RE/MAX.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
