How Property Taxes Actually Work in Canada

Property tax is set and collected by your municipality, calculated by applying a local tax rate (the 'mill rate') to your property's assessed value — which is determined by your provincial assessment authority, not your purchase price, and can lag behind current market values by a year or more.

Rates vary significantly by municipality, even within the same province — two comparably priced homes in different cities can have meaningfully different property tax bills.

Property tax is included directly in lenders' qualifying calculations (GDS/TDS ratios), alongside your mortgage payment and heating costs — a higher property tax bill reduces how large a mortgage payment you can otherwise support, even if the purchase price is the same.

Many lenders offer the option to have property tax collected monthly along with your mortgage payment and remitted to the municipality on your behalf, rather than you paying the municipality directly — worth deciding early, since it affects your monthly cash flow planning either way.