North Bay and three other northern cities dominate the list of the five municipalities with the highest property tax rates in Ontario with Windsor leading the way:
- Windsor: 1.818668
- Thunder Bay: 1.59108
- Sault Ste. Marie: 1.588067
- North Bay: 1.568182
- Sudbury: 1.546783
That's a list of property tax rates — not property tax bills — for 35 Ontario municipalities posted by Zoocasa.com, which touts itself as "a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions."
As officials from northern municipalities will bellow from wintry rooftops, property tax rates alone are not an accurate measurement of affordability — a lower tax rate does not necessarily translate into a lower tax bill. The property tax amount paid is calculated by multiplying the property tax rate by the Municipal Property Assessment Corporation (MPAC) home assessment.
The City of North Bay agrees with that sentiment, according to Communications Officer Gord Young. "Because property taxes are also dependent on assessed property value, the average North Bay homeowner will pay less in property taxes than the average homeowner in many of the other municipalities in this ranking despite them having lower tax rates."
In a report in SooToday by David Helwig, City of Sault Ste. Marie CAO Malcolm White relays the tax rates highlighted by these types of reports do not give a full picture of the dollar amounts paid by homeowners in taxes due to low property assessment values in that city and across the north.
"They do get into a little more detail in their article itself, providing a broader picture as to what makes up a tax bill," White says. "It's unfortunate that they continue to use a headline and an assessment of property tax rates alone because that is only part of the equation."
For instance, White says, "The price for a transit bus is around $592,000. To buy a new transit bus, it'll be that price in Sault Ste. Marie, or it would be that price in southern Ontario, too. That's the amount of money you would have to raise, in taxation, to pay for that bus.
"If you have a low assessment value," which is the case in North Bay, Sault Ste. Marie, and all across northern Ontario, "then you have to have a higher tax rate against that assessed value to get to the $592,000 that you need for the bus," White adds. However, "if you are in southern Ontario and you use one of the municipalities that have a higher assessed value, then you will only need a lower tax rate to get to that same amount of money."
It is also important to note municipal property taxes this year — in North Bay and throughout Ontario — are based on assessed values from 2016 and not the average home prices included in this ranking, per Young.
The record-setting real estate boom is not reflected in the MPAC assessments yet the Zoocasa article uses current property tax rates in conjunction with real estate sales figures from this year.
"A province-wide property assessment update has been postponed due to the pandemic. The province has also indicated that property assessments for the 2022 property tax year will continue to be based on 2016 values. In North Bay, the typical residential property is currently assessed at approximately $222,000," Young points out, not the $401,000 estimated assessment value used by this real estate website in its study.
Higher property values in municipalities with a larger taxpayer base — think the GTA — tend to have lower property tax rates, according to the report.
Toronto (0.611013), Markham (0.632908), and Richmond Hill (0.659549), all areas with high property values relative to other Ontario markets also have the three lowest property tax rates.
"In contrast, the cities with the highest tax rates often have the lowest-priced real estate." Another factor when it comes to higher property tax rates "is the city’s commercial-to-residential tax ratio; in most municipalities, businesses pay at least double the amount of tax than homeowners," according to the report. "Generally, a higher commercial property tax rate translates to a lower residential rate."