Don’t Forget To Add The Tax: What Your Property Tax Entails In Ottawa

Don’t Forget To Add The Tax: What Your Property Tax Entails

Blog • November 10, 2021

When you are planning to purchase a new home, there are many factors to consider. If this is the first home you have purchased, you may not be aware of all of the new costs to work into your budget. Depending on the value of the home, property taxes may be a significant amount to meld into your monthly expense list. Ensure that you know that your property value and the property tax you pay are not the same things. Municipal tax rates are established by your municipality and can vary, depending on the type of property you own.

Each year, municipalities decide how much they want to raise from property taxes to pay for services. This process determines the tax rate. When the municipality increases their budget, property taxes will increase.

What Services are Provided?

Property taxes support the budgets for many services within the local community that residents use publicly, or that help to promote the safety and security of each neighbourhood. The following are the services provided in each neighbourhood that are supported by the funds generated by the collection of property taxes.

Police Services
Road maintenance
Transit Services and Para Transpo
Recycle and waste disposal
Parks, rinks, and other leisure facilities
Emergency Services such as Paramedics and Fire
Bylaw enforcement
Public education
Libraries

How Are Property Taxes Calculated?

Property taxes are calculated using the assessed value of your property and multiplying it by the combined municipal and education tax rates for your class of property. Properties or portions of a property are classified according to the property’s use. Each category represents a different tax class. There are thirteen tax classes in Ottawa, with residential making up 65% of the total tax revenue coming into the city.

In Ontario, the Municipal Property Assessment Corporation (MPAC) determines the value of your property. Your property value is shown on an assessment notice from MPAC, as well as on your annual property tax bill. Suppose you disagree with the assessment that MPAC has established for your property. In that case, you may submit a Request for Reconsideration to MPAC free of charge. For information on how MPAC determines property values, you can always check www.mpac.ca

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When Will My Property Value Change?

Normally property values are reassessed every four years. In 2016, MPAC reassessed properties across Ontario, and these assessed values applied from 2017 to 2020. However, because of COVID 19, property assessments for the 2022 property tax year will continue to be based on January 1, 2016, values. This means your property assessment remains the same as it was for the 2021 tax year unless there have been changes to your property, for example:

If there has been an addition, new construction, or renovation
If a structure on your property was assessed for the first time
If there is a change to your property’s classification
If the property no longer qualifies as farmland, conservation land or managed forests
If all or part of your property no longer qualifies to be tax-exempt

Paying Property Tax In Ottawa

Your municipality will mail you a tax bill for every property you own. In Ottawa, tax payments are due mid-month. Payments after the due date are subject to a penalty of 1.25 percent. If your mortgage company pays your taxes, always ensure that the city knows who pays them. To avoid a penalty on your account, you should contact your mortgage holder. Always check that the taxes are being paid.

It is essential to understand how your property taxes are calculated. Always check your tax bill and make sure they are being paid. It is important to remember that every time you drive on our roads, walk in the park or if you or your family require a paramedic, police, or fire services, paying your property taxes has helped pay for these critical community supports.