{"id":9374,"date":"2017-01-18T01:00:07","date_gmt":"2017-01-18T06:00:07","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=9374"},"modified":"2023-01-20T10:08:26","modified_gmt":"2023-01-20T15:08:26","slug":"why-are-property-taxes-higher-in-the-suburbs","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/why-are-property-taxes-higher-in-the-suburbs\/","title":{"rendered":"Why Are Property Taxes Higher in the Suburbs?"},"content":{"rendered":"

Ever-increasing home prices in booming cities like Toronto and Vancouver have led to an influx of new and prospective homeowners flocking to the suburbs. Larger lot sizes and affordability are appealing, but there\u2019s one caveat: property taxes. They\u2019re a topic of heated discussion and grievances are often aired about them, but how much do we really know about how they\u2019re determined and what causes them to fluctuate?<\/p>\n

We\u2019re here to give you the lowdown on property taxes and help you determine whether a move to the suburbs is the right choice for you.<\/p>\n

Related Read: Ontario Cities With the Highest and Lowest Property Tax Rates in 2022<\/a>
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How Are Property Taxes Calculated?<\/h2>\n

If you\u2019ve ever wondered why a Durham resident pays more in property taxes than a Toronto resident for a home of lesser value, there\u2019s a very good reason. In Ontario, property taxes are calculated by taking the assessed value of a home \u2013 determined by the Municipal Property Assessment Corporation (MPAC) \u2013 and multiplying it by the property tax rate for your municipality. For instance, if you own a home assessed at a property value of $1,000,000 in Toronto, your property taxes will be approximately $6,300 while a home of the same value in Durham would have property taxes of $11,000.<\/p>\n

What Impacts Property Taxes?<\/h2>\n

At this point you\u2019re probably wondering why there\u2019s such a large variance in taxes across different cities. Property taxes cover a number of city services including police, parks and recreation and transit to name a few. Each city works with an annual budget and determines a property tax rate needed to cover revenue requirements.<\/p>\n

All else being equal, an increase in property values\u00a0would actually work to drive down<\/em> property tax rates \u2013 because a smaller portion is now needed to cover the same budgetary requirement.<\/p>\n

By the same logic, an increase in housing developments would also bring in more revenue thereby decreasing tax rates.<\/p>\n

Related Read: Ontario Property Tax Rates: What You Need to Know When Buying a Home<\/a><\/strong><\/p>\n

Why Do the Suburbs Cost More?<\/h2>\n

There are a few reasons it tends to cost more to live in the \u2018burbs, and they all go back to the basic equation of assessed value * property tax rate = municipal revenue.<\/p>\n