Municipality and School Tax

Municipality and School Tax

Property tax

Property owners in Canada must pay an annual property tax to the municipality. This tax is similar to the renovation fee, except that its amount can sometimes be very high. This tax being determined by the municipal council and collected by the municipality, its amount is completely different depending on the city of residence. Municipalities generally consider different parameters to calculate property tax. These settings differ depending on the city of residence. For example, the following may be mentioned.

  • Property value: The property price is calculated by the municipality or the company contracted by the municipality. Usually, this calculation is done annually and the result is provided to the property owner.
  • Location of the property: Usually, the newer the neighborhood, the higher the property tax.
  • Taxes determined by the province: sometimes the province also uses the location of this tax to determine its costs. For example, in the province of Quebec, an amount is added to the property tax in order to cover the costs of Public Schools.

How to pay property tax?

Municipalities usually receive part of the property tax in the first half of the year (usually in two installments) and on account. After the final amount of tax is calculated, in the second half of the year, the rest of this tax is collected. The municipality of Chatham collects this tax in four months of the year. It is also possible to ask the municipality to collect the tax automatically and monthly.

Consequences of not paying property tax

If you do not pay this tax, the municipality can confiscate and auction your property. Usually, the strictness of the municipality regarding the collection of property tax is more than the strictness of the bank in receiving loan installments. For this reason, many Canadian banks offer a service to their customers, during which the bank, when withdrawing the loan installment, also takes an amount for the property tax and pays the property tax to the municipality. In this way, the bank makes sure that you will never owe the municipality.

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