Durham Region Real Estate Blog

John Owen, Broker, REALTOR­®

RE/MAX IMPACT Courtice Durham

Why are property taxes so high in Oshawa?

Why are property taxes so high in Oshawa

Why are property taxes so high in Oshawa?

This article will help you understand the property tax rates in Oshawa compared to other communities in the GTA where you might consider buying a home.


It may be helpful to note that Oshawa's property tax rate is not the highest in Ontario.


How do property tax rates in Oshawa compare to other cities in the GTA?


Following is a list of local municipal tax rates for 2019 for residential property:


 City                  Rate (%)
 Toronto  0.615 
 Mississauga 0.801 
 Markham 0.660 
 Richmond Hill 0.688 
 Oshawa 1.345 
 Whitby 1.140 
 Pickering 1.104 
 Ajax 1.107 
 Clarington 1.173 
 Scugog 1.082 



Figures are rounded to 3 places, but it's clear to see that the rate is highest in Oshawa, and over double the rate in the City of Toronto!


At first look, it's apparent that taxes are outrageous in Oshawa, right?  Not so fast!  In order to see the impact on homeowners, we need to know how the average property looks when the tax is calculated.


How property taxes impact the average homeowner


Using the information from the previous table, and average property assessment values for 2016 (MPAC figures - 2016 was the last time all properties in Ontario were assessed), let's see how the average single family home taxes are for the same cities:


 City       

     Average 

Value 

 

Rate 

2016 

 

Property  Tax 

 Toronto   $770,000   0.636   $4,897 
 Mississauga 736,000  0.823  6,057 
 Markham 991,000  0.694  6,878 
 Richmond  Hill 1,028,000  0.717  7,371 
 Oshawa 356,000  1.407  5,009 
 Whitby 533,000  1.181  6,295 
 Pickering  563,000  1.153  6,491 
 Ajax 511,000  1.150  5,877 
 Clarington  402,000  1.223  4,916 
 Scugog 414,000  1.112  4,604 


As you can see, the average homeowner pays slightly more property tax in Oshawa than in Toronto, even though the tax rate is much lower in Toronto. Compared to the other large cities in the table, the average Oshawa homeowner actually pays less overall property tax. 


Average property tax GTA

The above graphic, from the Centre for Urban Research and Land Development at Ryerson University, shows average taxes paid in 2016 in GTHA communities. Oshawa actually falls below the GTHA median, and very close to Toronto on the list.


As home values rise (based on average assessed value) relative to other cities, the rates will drop proportionally, provided that other factors stay the same.


Toronto has a Land Transfer Tax


Just because Toronto has the lowest property tax rate doesn't mean that they don't have other ways of pulling in revenues. Toronto is the only municipality in Ontario with a Municipal Land Transfer Tax.


When you buy a home in the City of Toronto, you are subject to this tax.  Here is a link to the amount:


Ontario Land Transfer Tax Calculator


Other ways that different municipalities make money is through licensing, permits, levies, user fees for public facilities and fines.



Why such a variance in rates between cities?


The short answer is that each municipality has to provide (and pay for) a very similar package of services to its ratepayers.  Those include salaries for things like police, fire, EMS, road maintenance crews, garbage removal, social services, etc.  Also, there are things like water treatment, sewers and treatment, road and bridge construction, and the list goes on.


While some larger cities may benefit somewhat by economies of scale, they basically cost about the same.  Where average property values are lower, the tax rate needs to be higher in order to come up with a similar amount of tax revenue per home.


Different municipalities also have different ways of generating revenue. Things like lot levies for new development, fees for public facilities and transit, fines and licensing fees all play a role in the overall revenue picture.


There are new sources of revenue under consideration for some areas like municipal taxes (hospitality, sales, income, gasoline), road tolls, fees and more. Watch for some of these being introduced in the very near future.


Some of these are designed to help shift the cost away from residents and toward visitors and commuters (hospitality taxes, road tolls).


Outside the GTA


Looking just at the rate, you might get frustrated, but look at some other cities in Ontario (2019 rates):


City        Rate (%)
Oshawa  1.345 
Windsor 1.789 
Belleville 1.646 
Port Hope 1.517 
Thunder Bay 1.598 


The rate differences in these cities aren't as dramatic as those in the GTA, but you can see that they are clearly higher in other places.  Contrary to popular belief, Oshawa does not have the highest property taxes in the province!





Related Resources


Durham Region Property Tax Rates

Property Tax Rates Dropping in Oshawa, Durham Region and the GTA

Municipal Tax Rates 2014 in Oshawa, Whitby and Durham Region




Looking for more information?


If you would like more information on property taxes in Oshawa or the surrounding areas, please get in touch with me. 


If you are interested in selling or buying a home in the area, I would be most happy to help you. You will find me well informed on local real estate issues, as well as reachable and ready to earn your business. Give me a call direct at 905-434-0067.

Comments:
Shirley on May 23, 2014 3:39 PM posted:
Ok lets compare apples to apples; Toronto 750000 x 0.746% = $5595.00 in taxes Oshawa 750000 x 1.618% = $12135.00 in taxes Now see the real picture....No reason to be that high...We provide all the same as Toronto, but for some reason we are dinged, not all houses in Oshawa are valued at only $286000... I don't need any reply back, I have all the info I need... Thanks
bradleymarr on Nov 2, 2014 7:21 PM posted:
You should pay half the amount of property taxes if you own a $350,000 house in Oshawa compared to a $700,000 house in Toronto. Oshawa should be shamed of themselves and this is price gouging.
Richard Roma on Aug 2, 2015 11:49 PM posted:
That's all fine and great about the total relative tax burden of Oshawa being lower, but who wants to burn excessive amounts of money on property tax? Even if the Toronto house is $1M+, the property owner there over time will at least see more money coming back to them vs. the Oshawa resident who got grinded with excessive property taxes!
JOE on Mar 18, 2016 10:46 AM posted:
Since, 2015... there are a lots of homes and business are developing in Oshawa,, I think city can recheck the tax calculation and repost the tax rate to live and invest more people from other cities... City of Oshawa should encourage business and home buyers tax deduction and this city can come up better than Toronto or Markham in 2020...
wayne on Apr 16, 2017 1:49 PM posted:
Toronto taxes are so low because they have voting power so they are subsidized by the provincial government with further subsidies by the federal government.The rest of us need not only to pay our own way, but we need to pay theirs as well. Song and dance all you want, thats the way it is. Most votes win.
Bruce on Aug 25, 2017 12:57 AM posted:
John, your explanation is dead on. I used to sell Real Estate and always saw this point. I can not believe after your detail that some can not see this. Possibly if the word RATE was taken out as this makes it appear as a higher fee, when in fact it is simply a multiplier due to different home values between communities.If a city with all very high value homes charged the same rate as an area of low cost homes, yet wages were similar for the services (police, fire, teachers, etc.) you would end up with a surplus of taxes being collected!
John on Nov 8, 2017 12:36 PM posted:
Pickering also pays high property taxes. I moved to Pickering from Markham in 2016, my home in Markham was worth about 60% more in resale value than my home in Pickering, yet my property tax in Pickering is $3000 higher. Services provided are similar in each city. Residents of Durham seem to pay much more than Toronto or Mississauga for the same services.

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