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 2023 for residential property:
It's clear to see that the rate is the 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, COVID has delayed the updates due for 2021), let's see how the average single family home taxes are for the same cities:
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.
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. Budget increases by Municipalities will change the rates, however.
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:
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 (like photo radar!) 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, photo radar, red light cameras).
Property Tax Rates Outside the GTA
Looking just at the rate, you might get frustrated, but look at some other cities in Ontario (2023 rates):
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!
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.