Property Ownership 101:Property Taxes and Title Search

By: Jean Boynton

Property Ownership 101:Property Taxes and Title Search

Tags: property taxes,title search, assessment,rates

As all homeowners should know, buying a house is a task that can be as difficult as it is expensive. There are many costs associated with owning a property—be it maintenance, renovations, or mortgage payments. However, one cost that is commonly overlooked when purchasing a home is property tax.

A property tax can cause quite the headache for any novice homeowner, which is why it’s crucial to understand what it is before jumping into any property investment. Property taxes can be understood in two different areas:

What is property tax?

Property tax is a type of tax that all property owners need to pay on an annual basis. This tax money is then used to fund various projects within a homeowner’s community, like the building of schools, road maintenance, and construction. These tax dollars are also used to pay for local services like the police, fire, and other emergency services. This tax is typically determined by two factors:


An assessment of a property is generally conducted within the parameters set by a provincial institution. For example, an Ontario property’s value is determined by an assessment by the Municipal Property Assessment Corporation, while the value of a property in British Columbia is calculated by BC Assessment.

There are many factors that are considered when determining a property’s value. Assessment institutions typically look at things like the property’s age, its size, the surrounding neighbourhood, its amenities, and its current state—be it how many renovations it has received or any problems that need to be addressed within the home. Through these factors, a home’s value can be calculated.

As for the tax rates, these rates vary between Canadian municipalities and local tax authorities. For example, while Ontario cities like Toronto and Vaughan may be neighbouring, their tax rates will differ due to the different municipalities governing those cities. These rates are highly dependent on things like population and infrastructure needs. There can even be multiple rates used, like the Residential and Education tax rates in Ontario.

To calculate a specific home’s property tax, it would simply be the value of a property—which is determined at the provincial level—multiplied by the tax rate—which is determined at the municipal level.

How does it affect home-buyers and homeowners?

Since property tax is determined at both the provincial and municipal level, the tax varies greatly between cities across Canada. This undoubtedly has an impact on home-buyers and homeowners around the country. While choosing a home to live in may be hard, aspiring homeowners need to consider their city’s property and land transfer tax.

A land transfer tax is much like a property tax, except it only needs to be paid when purchasing a new home. Instead of the tax being applied to a property’s value, the land transfer tax is determined by the total purchase price of the property. A land transfer tax could potentially add a few thousand dollars to the final purchase price of a home, which is something that often surprises novice and aspiring homeowners.

Both the property tax and the land transfer tax are two costs that are often overlooked when purchasing and owning a home. All homeowners should always factor in these taxes within their budget when making a transaction as big as this.

Research is integral to any homeowner—novice or experienced. When looking to purchase a new home, any homeowner should research a city’s property and land transfer tax before finding a city to reside in.

Even if the average home price within a particular city is low, that doesn’t necessarily mean you’ll be paying a lower property tax. Since tax rates vary from city to city, some Canadian cities have a higher tax rate than others.

This is why it’s vital to look into a city’s property tax—it can save homeowners from paying an outrageous sum of money every year. However, aside from researching the various property taxes between cities, it’s just as crucial to research the specific property you own or plan to own. This is done through property title searches.

Property title searches are a must for any homeowner looking to buy a new home. These searches allow homeowners to find out if there is anything that might impede on their ability to purchase a new home. These provide buyers with important information about the property and the seller—including any outstanding balances that the buyer has yet to pay, like any mortgages or debts, and any issues that might prevent the seller from purchasing the property, like the seller’s legal right to sell the property.

Property taxes and title searches are among the many things that homeowners should investigate before making an investment. When looking to purchase and own a home in any of Canada’s beautiful cities, it’s worth doing some research to figure out if a specific home in a city is within your budget.

Research goes a long way, especially if it helps you prepare for the seemingly hidden costs associated with purchasing and owning a home, as well as the legal details surrounding a specific property.