Property Tax

Learn how property tax works in Canada, how it's calculated based on assessment values, and what services it supports in your community.

Property Tax

May 22, 2025


What is Property Tax?

Property tax is an annual levy paid by property owners to their local municipality, calculated based on the assessed value of their property.

Why Property Tax Matters in Real Estate

In Canadian real estate, property taxes fund essential community services such as:
  • Schools and education boards
  • Road maintenance and snow removal
  • Garbage collection and recycling
  • Fire, police, and emergency services

The amount of property tax owed is determined by multiplying the property's assessed value (from a municipal or provincial assessment authority) by the applicable local tax rate (mill rate).

Different property types—residential, commercial, industrial—may be taxed at different rates. Municipalities typically issue tax bills semi-annually or quarterly.

Understanding property tax is vital for budgeting ongoing homeownership costs. Buyers should always factor property tax into affordability calculations and can often estimate future taxes based on the assessment and published mill rates.

Late payments may result in interest charges or liens on the property, so timely payment is essential.

Example of Property Tax

A homeowner in Calgary receives a 2024 property tax bill of $4,200, based on their assessed home value of $700,000 and the municipal mill rate.

Key Takeaways

  • Annual tax based on property assessment.
  • Funds local services and infrastructure.
  • Varies by location and property type.
  • Calculated using assessment × tax rate.
  • Must be budgeted and paid on time.

Related Terms

  • Property Assessment
  • Municipal Tax
  • Mill Rate
  • Homeownership Costs
  • Tax Arrears

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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