Property Tax

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

• 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