Northern Ontario cities have highest property tax rates, but that doesn't mean they pay more in tax

Home prices are expected to climb higher next year as unmet demand in the second half of 2020 carries over into 2021, a report by Royal LePage says.

Sudbury -

Zoocasa is out with its annual report and it's suggesting northern Ontario has some of the highest tax rates in the province.

It specifically centres out three cities -- Sudbury, Sault Ste. Marie and North Bay -- which made its top five list of the highest rates in the province. But that doesn't mean they're paying the most in taxes.

"Really this is an awareness piece," said managing editor Penelope Graham. "Zoocasa's mandate is to educate home buyers about all of the factors that can impact your budget when you're considering a community to move to and property tax specifically, that's an expenditure that's going to linger over the lifetime of your home ownership."

Graham said it's really important to understand that if you're moving to a community or your home's value has increased over recent years, how that can impact your bottom line.

Zoocasa surveyed 35 municipalities from across Ontario based on the residential property tax rate.

"Having a higher tax rate doesn't necessarily mean residents will be paying more tax," she said. "This is really important to keep in mind when you're looking at cities like Thunder Bay, Sault Ste Marie and Sudbury which consistently rank in the highest cities for property tax rate and there are a number of reasons why this is."

Graham said it has a lot to do with how the residential tax rate is calculated by the city. She said when they set the rate, they're looking at a variety of issues including the size of the tax base, the average home price and the strength of the commercial sector.

It's also important to note, the study doesn't take into account the home's assessment value which is calculated every four years by MPAC.

"The list is just highest to lowest, a place to keep all those rates in one place because that information isn't really compiled anywhere else so it's a learning tool," said Graham.

"It's no surprise to me that our municipalities in Northern Ontario have some of the highest tax rates -- that does not mean we have the highest property taxes," said Sudbury Ward 7 Coun. Mike Jakubo.

Every time this report comes out, Jakubo's phone starts to ring and he gets people sending him copies of the study.

Jakubo, an accountant by trade, said this study doesn't take into account a lot of things, including service levels from city-to-city.

"When they look at this they have to take into account the size of the municipality and the different levels of service that are provided in that municipality," he said.

Even still, real estate experts like Tyler Peroni said it's still valuable information for homeowners to have.

Peroni is chair of the Sudbury Real Estate Board

"It's a huge question, it's probably one of the No. 1 questions that we do get," he said. "We get a phone call saying is still this available, what are the taxes? What are the taxes in that first conversation so people really do care what the taxes are."

The Zoocasa report breaks down what all of it means and what homebuyers need to keep in mind.

It also determined cities that have some of the highest tax rates also tend to have some of the lowest real estate prices. So taxes on a $1 million home in the Sault would be higher than a $1 million home in Toronto – but the home in Toronto would be far smaller.

According to Jakubo, the BMA study which is widely subscribed to, puts Greater Sudbury as the second lowest for property tax rates in Ontario for municipalities with a population over 100,000.

Read the full report here.