Property tax is a yearly cost of owning a home, set by your municipality. This page explains how it’s calculated, shows current rates for cities where we have the official figures, and covers how it affects your mortgage. City-by-city pages are in the property tax hub.
How property tax is calculated
Your tax is your property’s assessed value multiplied by your municipality’s residential tax rate. The assessed value comes from your province’s assessment authority, such as MPAC in Ontario or BC Assessment in British Columbia, and the rate usually combines a municipal rate and an education rate. Calgary, for example, adds a municipal rate and a provincial education rate to get its total.
Residential rates in major cities
| City | 2026 residential rate | Tax on a $500,000 home | Tax on an $800,000 home |
|---|---|---|---|
| Toronto | 0.767% | $3,837 | $6,138 |
| Calgary | 0.665% | $3,325 | $5,320 |
| Edmonton | 1.036% | $5,182 | $8,291 |
Rates are from each city’s own published 2026 rates and apply to assessed value, not the price you paid. A low rate doesn’t mean a low bill: the bill depends on both the rate and the assessed value. Other cities publish their rates in parts (municipal, school and area rates) that differ by neighbourhood, so check your city’s property tax page or your latest tax bill.
How property tax affects your mortgage
Lenders count property taxes in your gross debt service (GDS) ratio, together with the mortgage payment at the qualifying rate and heating. For an insured mortgage, CMHC caps GDS at 39% of gross income. So for the same income, a higher property tax bill means a smaller mortgage. The affordability calculator lets you enter your own property tax rate.
BC's home owner grant
In British Columbia, the home owner grant reduces property tax on your principal residence if you’re the registered owner, and a Canadian citizen or permanent resident living in BC. If the assessed value is over the grant threshold, the grant is reduced. From January 1, 2027, the regular grant is $570 everywhere in BC. You must still pay at least $350 in property tax. Seniors, veterans and people with disabilities can qualify for a larger additional grant. Other provinces have their own credits and deferral programs; check your province’s property tax pages.
Property tax when you buy
When you buy a home, your lawyer or notary adjusts for property tax the seller has already paid, or hasn’t paid, for the year, on the statement of adjustments at closing. After that the bill is yours. You can pay the municipality directly or, where your lender offers it, through your mortgage payments. Paying property taxes with your mortgage compares the two.