Property taxes are on the rise, and many homeowners are wondering what factors influence their tax rates. Whether you’re a homebuyer, homeowner, or real estate investor, understanding how property assessments work and how to potentially lower your tax bill is essential.
How Property Taxes Are Calculated in Ontario
In Ontario, property taxes are determined by the Municipal Property Assessment Corporation (MPAC), a publicly funded, not-for-profit organization. MPAC assesses the value of all real estate across the province, which directly affects your tax bill.
Your property tax is calculated using this formula:
📌 Assessed Property Value × Municipal Tax Rate = Annual Property Tax
MPAC typically reassesses properties every four years, phasing in new values over time. However, due to the COVID-19 pandemic, the Ontario government postponed the 2020 assessment update, meaning, as of writing this blog in February of 2025, property taxes have been based on values from almost a decade ago. Meanwhile, many municipalities have increased their tax rates.
When Will MPAC Reassess Property Values?
It doesn’t sound like MPAC will be reassessing properties in 2025, but it’s probably not far around the corner. When this occurs, owners of real estate in Milton, Oakville, Burlington, Toronto, and other quickly growing municipalities could see a significant increase in their assessed values –the good news is that these values are typically phased in over four years, easing the pain of increased taxes (as if we don’t have enough to pay already.)
Will My Property Taxes Go Up?
According to MPAC, a reassessment does not necessarily mean your property taxes will increase. The key factor is how your assessed value changes relative to the average change for similar properties in your municipality.
🔹 New subdivisions with similar homes: Property taxes will likely increase.
🔹 Rural areas with fewer comparable properties: Taxes may stay the same or increase slightly.
🔹 High-demand cities (Milton, Oakville, Toronto, etc.): Expect values to rise significantly.
Assessed Value vs. Market Value
It’s crucial to understand that your home’s assessed value is often much lower than its actual market value. Market value is determined by real estate trends, supply and demand, and recent sales, whereas assessed value is based on historical data and municipal calculations.
Current Property Tax Rates in Ontario
Each municipality sets its own tax rates, which can vary significantly. Here’s a look at some of the current Ontario property tax rates:
- Milton: 0.77%
- Hamilton: 1.42%
- Oakville: 0.79%
- Toronto: 0.71%
There are speculations that these rates could increase! Tune in to our real estate podcast where we discuss property tax trends and their predictions for upcoming increases. Skip to 6:29 for their expert analysis!
How to Contest Your Property Tax Assessment
If you believe your property’s assessed value is too high, you can file a request for reassessment through MPAC:
- Visit MPAC.ca and log in to AboutMyProperty.ca.
- Use your land registry ID to submit a reassessment request.
- Provide supporting documents, such as recent home appraisals or comparable sales data.
Renovations and Property Tax Reassessments
Making major renovations? Be aware that certain home improvements can trigger a reassessment. If you:
- Convert a basement into a legal rental unit
- Build a home addition or make major structural changes
- Perform renovations that require a permit
…it could result in a higher assessed value and, consequently, higher property taxes. If you’re purchasing a recently renovated home, check with the local municipality to confirm the current tax rate, as it may not yet reflect the updated property value.
Stay Informed with Milton real estate agents, the KT Team.
Want to hear more insights? For personalized advice on buying, selling, or managing your real estate investment, contact KT Realty at 📞 1 (800) 617-0090.
