Property Taxes with the Canadian Mortgage App
Nobody enjoys paying taxes, but they’re a necessity of life. In this article, we’ll look at property taxes: what they are, how they are determined and how you can pay your property taxes.
What are Property Taxes?
Property taxes are a levy to do with the tax-assessed value of your property.
The word “levy” sounds a lot like “lien.” Both start with the letter L and are easy to confuse. Understanding the difference between the two is essential because they aren’t the same.
A levy seizes your property if you fail to pay your tax debts to your local municipality. A lien is a legal claim against your property to secure the payment of tax debt.
There are two parts to property taxes: a municipal part and an education part.
Each municipality sets its municipal portion. The upper-tier municipality will be responsible for setting one tax rate if you’re in a larger municipality with two tiers. Meanwhile, the lower tier will be responsible for setting its tax rate.
For the education part, your province’s Minister of Finance is responsible for setting the rates. The education part, as the name suggests, goes towards paying for an elementary and secondary school in the province.
How are Property Taxes Determined?
Your property’s property taxes are calculated by taking your property’s assessed value and multiplying it by the tax rates for the municipality and education levies for the correct tax class (i.e., there are separate tax classifications for residential and commercial properties).
Your province determines your property’s tax-assessed value. It uses its methods, such as recent comparable sales, to determine how much your property is worth. You can appeal your property tax assessment if you disagree with it.
How can I Pay My Property Taxes?
You can pay your property taxes directly to your municipality or have your mortgage lender pay them on your behalf. If your mortgage lender pays them on your behalf, your mortgage lender will collect an extra big mortgage payment, so there’s also enough to pay the property taxes.
Some lenders give you the option of paying your property taxes yourself or through them. Others let you choose. If you prefer to pay yourself, you’ll want to work with a lender who gives you that option.
How the Canadian Mortgage App Can Help
You’ll be happy to know that the Canadian Mortgage App includes property taxes.
You have the option of entering the property taxes for any property that you’re thinking of buying. It’s important to enter accurate property taxes in the area you’re considering buying, as the property taxes for one place can vary for the next. Property taxes are also used for mortgage stress test purposes.
What are you waiting for? Download the Canadian Mortgage App today to try it out.