“Yay, tax payment time!” – said absolutely no one. Taxes are just like the end of a great weekend – inevitable and slightly painful, and property taxes are no exception. Property taxes are an unavoidable cost of home ownership that many home buyers forget to budget for until the last minute. So, if you’re planning to buy a house for sale in Brampton soon and haven’t included property taxes in your budget yet, take care of that right away. On top of that, here are a few more key things about property taxes you should be aware of. 

1. You Pay Property Taxes for a Good Reason

Contrary to what people might think, property taxes aren’t just an extra expense tossed towards you for no reason. In reality, the revenue collected through property taxes fund essential services in your community, like road maintenance, public transit, garbage collection, fire and police protection, and parks and recreational facilities. So, while that property tax might sting a little, remember it helps pay for services you and your neighbours rely on daily.

2. All Kinds of Homes are Taxed

No matter what kind of home you buy – a detached, condo unit, townhouse or even a cottage – you’re responsible for paying property taxes. Once your name is on the title, you must pay those taxes. And yes, this applies even if you:

• Bought the home outright with cash and have no mortgage.
• Live in the house part-time.
• Rent the place out.

There’s something else you should keep in mind if you’re looking at newly built houses for sale in Brampton. Property taxes on newly built homes are usually lower in the first year or two. That’s because, at first, the municipality typically taxes only the land – not the building. But once MPAC (Municipality Property Assessment Corporation) updates their records to include the structure on the land, you’ll receive a supplementary tax bill. That bill could arrive months or even years after you have moved in. So, keep that in mind if you plan to move into a brand-new home.

3. Missing Property Tax Payments Comes with Big Consequences

If you fail to pay the property taxes, the consequences can snowball quickly:

• Interest and Penalties: Your city will charge you a penalty as soon as you miss a property tax payment. In Brampton, you’ll face a 1.25% starting the day you default. A 1.25% interest will keep adding every month until you pay the taxes.
• Collection Notices: The city will start sending you notices – and possibly even tack on additional collection fees.
• Unpaid Taxes Become a Lien: If you continuously miss payments, the city can place a lien on your property. After that, the municipality will have a legal claim on your property.

You will have to face consequences even if the missed payments were from the previous owner. Usually, the seller or their lawyer will settle the lien during the sale by deducting the amount from the proceeds. But if not handled correctly,  it could delay your purchase or create legal complications.

4. The Assessed Value Sets Your Property Tax Amount – Not the Purchase Price

One of the biggest misconceptions among homebuyers is that the property tax amount depends on the home’s purchase price. But in reality, property taxes depend on:

• The assessed value of your home
• The tax rate set by your city or municipality

The assessed value is MPAC’s assessment of what your home would have sold for on a specific date in the past. The MPAC was supposed to carry out the last general assessment in 2020 however, the pandemic caused a delay. Officials haven’t announced yet when the next general assessment will happen. That means your current property tax bill is likely based on the last available assessment (2016), even if your home’s market value has changed a lot since then.

5. You Can Dispute Your Property Tax Assessment

If you significantly upgrade your new home, MPAC may reassess your property before the yet-to-be-announced general assessment. And if you believe the new assessed value is too high, you can actually challenge it. Here’s how:

STEP 1: 

You can request the MPAC to take another look at your home’s assessed value (Request for Reconsideration). To do that, you must go to AboutMyProperty.ca and file your request online within 120 days of the Property Assessment Notice’s date.

STEP 2: 

If you still don’t agree with the MPAC’s assessed value, you can take your concerns to the Assessment Review Board. To appeal, you must file by March of that same year for or within 90 days of receiving MPAC’s decision.  

6. Brampton Has Higher Property Tax Rates Than Toronto

Toronto homes are more expensive than those in Brampton. However, Brampton homeowners pay more in property taxes. That’s because the property tax rate in Brampton is higher than in Toronto. In 2024, Toronto’s residential property tax rate was 0.71%, while Brampton’s was 1.10%. So, if you buy a $700,000 house for sale in Brampton, you could be paying close to $7,700 annually in property taxes. On the other hand, a similarly priced home in Toronto might only cost you about $4,970 in property taxes.

7. You Might Be Able to Include Property Taxes in Your Mortgage Payments

Some lenders offer an option to roll your property tax and home insurance payments into your monthly mortgage. Here’s how it works:

Let’s say your annual property tax and insurance bill totals $9,000. Your lender will divide that amount into 12 equal payments of $750 and collect it monthly along with your mortgage. The tax and insurance money usually goes into a special escrow account. The lender will pay your property taxes and insurance from the escrow account on their respective due dates. However, if you want, you can also pay property taxes directly to the city.

Set Money Aside for The Other Home Ownership Expenses as Well

Property taxes are just one of the many expenses that often catch home buyers off guard. There are other homeownership expenses, like maintenance, home insurance, and utility bills, that many buyers plan to budget for. So, as you plan for your exciting journey to become a homeowner, ensure you are ready for every expense. You can use online home value calculators that show you a full breakdown of the total cost of owning a home. Or even better, talk to your realtor. The real estate expert can walk you through the costs most buyers miss. The more prepared you are for the expenses, the smoother your homeownership journey will be.