Kingston homeowners are paying some of the highest property tax rates in the province, according to a Thursday, Aug. 1, 2019 Zoocasa report ranking residential property tax rates of 35 Ontario municipalities.
Toronto came in at number one, with the cheapest property tax rate of 0.614770 per cent. Windsor brought up the rear in affordability at a hefty 1.789394 per cent.
At number 26, Kingston has a property tax rate of 1.342238 per cent. This would come out to $3,356 of tax on a home assessed at $250,000, $6,711 on a $500,000 home, and $13,447 on a $1 million home.
Kingston homeowners are paying approximately double the property tax paid by homeowners in Toronto, Markham, Milton, Richmond Hill, and Vaughan, the five cities with the lowest property tax rates.
Property tax, which is calculated by multiplying your most recent home value assessment by the residential rate set by your local municipality, is set by each city council at a rate that will generate revenue for the city. As real estate values rise and populations grow, property tax revenues increase, allowing city council to maintain low property tax rates.
“In contrast, the cities with the highest tax rates often have the lowest-priced real estate,” wrote Zoocasa Managing Editor Penelope Graham.
A May 17, 2018 Zoocasa report on Ontario housing affordability by city ranked Kingston as one of the most affordable cities to buy a home in Ontario out of 21 cities. As the fifth most affordable Ontario city, Kingston had an average home price of $366,582. Thunder Bay was the most affordable at $217,745 and Toronto sat at the bottom of the affordability rankings with an average home price of $804,584.
Commercial property tax rates can also affect cities’ residential property tax rates. Business across Canada often pay an average of 2.85 times the amount of tax that homeowners do.
“Generally, a higher commercial property tax rate translates to a lower residential rate, and vice-versa,” Graham wrote. “A local council may opt to hike the latter if they feel their community needs to offer more competitive advantages to businesses.”
The Government of Canada is exempt from paying taxes on federally owned property such as educational institutions, correctional institutions, and military bases. Instead, the federal government distributes funds to local and provincial governments through the Payment in Lieu of Taxes (PILT) program.
As the home of many federal institutions, Kingston receives less in commercial property tax. There is a Canadian Forces Base and three post-secondary schools, Queen’s University, Royal Military College, and St. Lawrence College, with campuses in Kingston. Collins Bay Institution, Bath Institution, Frontenac Institution, Joyceville Institution, Millhaven Institution and the now-closed Kingston Penitentiary are all located in or around Kingston, giving the area the highest concentration of federal penitentiaries in Canada. These contributions to the community receiving less commercial property tax can affect the high rate of residential property tax, according to Zoocasa.