How is property tax calculated in Ontario, and why is it not based on what you paid?
Multiply your purchase price by the municipal rate and you will get a number that is far too high. Here is why, and what to use instead.
The short answer
Ontario property tax is charged on your MPAC assessed value, not on your purchase price, and the province’s valuation date is still 1 January 2016. In Toronto the average assessment is about 68% of the average sale price, so estimating tax from what you paid overstates the bill by roughly 46%.
Written forBuyers estimating the running cost of a home, and owners trying to work out why their tax bill does not match what they paid.
The short version
- Property tax is levied on the MPAC assessed value, which is not the same as your purchase price.
- Ontario’s valuation date is still 1 January 2016, and the reassessment has been postponed with no announced restart.
- A house built last year is still assessed at what it would have sold for in 2016.
- In Toronto, the average assessment is about 68% of the average sale price — so price times rate overstates the tax by around 46%.
- The reliable figure is the annual tax stated on the listing, or the assessed value on your own MPAC notice.
Assessed value, not purchase price
Every municipality in Ontario sets a tax rate each year, and that rate is applied to the assessed value of your property as determined by the Municipal Property Assessment Corporation. It is not applied to what you paid for the house.
That distinction would be a technicality if assessments tracked the market. They do not. Ontario’s legislated valuation date is 1 January 2016, and the province has postponed the reassessment repeatedly. Every 2026 tax bill in the province is calculated on what a property was worth more than a decade ago.
Every 2026 tax bill in the province is calculated on what a property was worth more than a decade ago.
How wrong the shortcut is
The City of Toronto reports an average current value assessment of $692,140. The Toronto Regional Real Estate Board reported an average Toronto selling price of $1,010,836 in July 2026. Assessment is therefore running at roughly sixty-eight per cent of sale price.
Applied to a tax bill, that means estimating from the purchase price overstates the annual tax by about forty-six per cent — roughly $2,445 a year on an average Toronto home. A calculator that quietly does this looks precise and is badly wrong.
What to use instead
Every MLS® listing states the property’s actual annual taxes. That figure is the real amount levied on the real assessment, and it is the one to budget from.
If you are estimating for a home you have not found yet, use your own assessed value from your MPAC Property Assessment Notice or your municipal tax bill, and apply the municipality’s published rate. You cannot look up someone else’s assessment: MPAC requires the nineteen-digit roll number and an access key mailed to the registered owner.
| Municipality | Total rate | Tax on $750,000 assessed |
|---|---|---|
| Markham | 0.722889% | $5,421.67 |
| Toronto | 0.767311% | $5,754.83 |
| Mississauga | 1.087901% | $8,159.26 |
| Brampton | 1.253381% | $9,400.36 |
| Oshawa | 1.575342% | $11,815.07 |
A low rate does not mean a low bill
Comparing municipalities by tax rate alone is misleading, because the rate is the levy divided by a frozen 2016 assessment base. Toronto’s rate is less than half Brantford’s, which says a great deal about the two assessment bases and very little about what two comparable homes actually pay.
Hamilton does not even have one rate. It charges by former municipality, by urban or rural, and by fire service type, ranging from 1.247160% to 1.557234% — a difference of about $2,300 a year on the same assessment.
Written by
Robin PatelSalesperson · The Agency Toronto
Updated
Published
Read in your language
A machine translation, not Robin’s words. For anything that decides money, ask him in Gujarati or Hindi directly.
