Property Tax Overview in Canada

Canadian property ownership triggers obligations at three levels: an annual municipal property tax every year of ownership, a one-time Land Transfer Tax on purchase, and — for certain vacant or foreign-owned properties — additional annual levies. Understanding which rules apply requires knowing the province, the municipality, and who holds title.

For an overview of Canadian federal income tax obligations see the Canada country overview.

How does Canadian municipal property tax work?

Property tax in Canada is an exclusively municipal instrument. Each city, town, or rural municipality sets an annual mill rate, which is applied to the property's assessed value to produce the tax bill. The assessment itself is determined by a separate provincial authority — the Municipal Property Assessment Corporation (MPAC) in Ontario; BC Assessment in British Columbia; and analogous provincial bodies in Quebec, Alberta, and the Atlantic provinces.

In Ontario, MPAC's current valuation base date remains January 1, 2016, frozen since the 2017 assessment cycle and held through subsequent pandemic-era delays. This means Ontario assessed values are significantly below current market values in most major markets, and municipalities adjust mill rates upward to maintain revenue. The assessment formula produces an annual bill as: assessed value x (municipal mill rate + education tax mill rate). The education tax component is set by provincial government and flows to school boards; in Ontario the residential education rate is a uniform 0.153% province-wide.

Mill rates differ sharply across Ontario cities. Toronto's 2025 residential total rate was approximately 0.754%, comprising a city portion near 0.601% and the education levy. By contrast, Windsor's rate reached roughly 1.94%, Hamilton's 1.33%, Ottawa's 1.07%, and Mississauga's 0.88%. The disparity reflects both local spending levels and the frozen assessment base affecting relative burdens differently across markets.

The table below shows 2025 approximate residential effective rates for selected Canadian cities:

Rates are expressed as annual tax as a percentage of assessed (not market) value. A qualified tax professional can compute the expected annual bill for a specific property based on its MPAC or BC Assessment notice.

What is Land Transfer Tax and who pays it?

Land Transfer Tax (LTT) is a one-time provincial levy payable by the buyer at closing. Alberta and Saskatchewan do not impose an LTT — Alberta charges a modest land-titles transfer fee instead. Every other province levies a graduated tax on the purchase price.

Ontario's provincial LTT applies at marginal rates: 0.5% on the first CAD 55,000; 1.0% on CAD 55,001 to CAD 250,000; 1.5% on CAD 250,001 to CAD 400,000; 2.0% on CAD 400,001 to CAD 2,000,000; and 2.5% on amounts above CAD 2,000,000 for single-family residences. Buyers within the City of Toronto also pay a Municipal Land Transfer Tax at identical marginal rates, effectively doubling the LTT burden. On a CAD 900,000 Toronto purchase, the combined provincial and municipal LTT exceeds CAD 32,000.

Ontario's First-Time Home Buyer Refund provides up to CAD 4,000 against provincial LTT; the Toronto Municipal LTT offers a parallel rebate of up to CAD 4,475, for a combined saving of up to CAD 8,475. Buyers must never have owned a principal residence anywhere in the world, and the refund claim must be filed within 18 months of the transfer date.

British Columbia's Property Transfer Tax (PTT) applies at 1% on the first CAD 200,000; 2% on CAD 200,001 to CAD 2,000,000; 3% on CAD 2,000,001 to CAD 3,000,000; and a further 2% on the residential portion above CAD 3,000,000. BC's First-Time Home Buyer Exemption waives the full PTT for purchases up to CAD 835,000 (updated thresholds as of 2025), with a partial exemption phasing out to CAD 860,000. Maximum saving reaches approximately CAD 14,700. A separate Newly Built Home Exemption provides full PTT relief on new construction up to CAD 1,100,000, phasing out at CAD 1,150,000.

Quebec's Welcome Tax (Droits de mutation) uses a tiered structure starting at 0.5% with higher rates on portions above CAD 500,000; Montreal adds surcharge bands reaching 3% on the portion above CAD 2,000,000. Manitoba, New Brunswick, Nova Scotia, and Prince Edward Island each maintain their own LTT regimes with varying rate schedules. Prince Edward Island offers its own first-time-buyer rebate program.

What happened to the Underused Housing Tax?

The federal Underused Housing Tax (UHT), introduced under the Underused Housing Tax Act 2022, imposed a 1% annual levy on the assessed value of residential property in Canada that was vacant or underused, targeting non-resident and foreign-owned holdings. Affected owners were required to file an annual return by April 30 each year even if no tax was ultimately owing after exemptions.

The 2025 federal budget proposed eliminating the UHT, and Bill C-15 received Royal Assent on March 26, 2026, formally enacting the elimination. No UHT is payable for the 2025 calendar year or any subsequent year, and no UHT return is required for 2025 onward. This applies to all residential property owners regardless of residency status.

However, obligations for the 2022, 2023, and 2024 tax years remain fully in effect. Filing deadlines, payments, penalties, and interest for those years are unchanged. Property owners who held affected residential property in those years and have not yet filed returns remain exposed to CRA enforcement. The statutory repeal of the UHT Act and regulations is deferred to January 1, 2035, as a legislative technicality; the practical effect is that no returns and no tax apply from 2025 forward.

Under the original UHT rules, most individual Canadian citizens and permanent residents who held title directly were classified as "excluded owners" facing no obligation. Affected-owner status applied mainly to corporations, partnerships, and trusts (including bare trusts) holding residential property, and to non-resident individuals. Exemptions for qualifying occupancy (principal residence or qualifying tenancy) could eliminate the 1% levy even for affected owners who properly filed.

What provincial vacancy and speculation taxes apply?

British Columbia operates two layered annual taxes on residential property beyond standard municipal property tax.

The provincial Speculation and Vacancy Tax (SVT) applies across 59 designated communities including Vancouver, Victoria, Kelowna, Chilliwack, and Abbotsford-Mission. For 2026 (covering the 2025 reference year), the provincial government increased rates: foreign owners and satellite-income earners face 3% of assessed value (up from 2%); BC citizens and permanent residents with vacant homes face 1% (up from 0.5%). A BC resident tax credit, doubled to CAD 4,000, offsets the levy for most BC-resident owner-occupiers. Owners must file a declaration annually by March 31 even if fully exempt.

The City of Vancouver Empty Homes Tax (EHT) is a separate municipal levy applying to residential properties within Vancouver city limits that are vacant for more than six months in the reference year. For the 2025 reference year the rate is 3% of the property's assessed taxable value. Declarations for the 2025 reference year were due February 3, 2026. Properties used as a principal residence for at least six months, or rented for at least six months, are exempt. Owners in Vancouver may owe both the provincial SVT and the municipal EHT simultaneously.

Ontario does not have an equivalent annual vacancy tax at the provincial level, though some municipalities (notably Toronto) have explored or introduced vacant-home taxes. A qualified tax professional with knowledge of the specific municipality can confirm current local obligations.

How do foreign-buyer restrictions and taxes apply?

Several overlapping measures restrict or impose additional costs on non-Canadian purchasers of residential property.

Ontario's Non-Resident Speculation Tax (NRST) applies at 25% of the purchase price for foreign nationals, foreign corporations, and taxable trustees acquiring residential property anywhere in Ontario. The tax was introduced in 2017 at 15% for the Greater Golden Horseshoe region, extended province-wide in March 2022, and raised to 25% in October 2022. A limited rebate exists for buyers who subsequently become Canadian permanent residents within four years of purchase.

BC's Additional Property Transfer Tax (commonly called the Foreign Buyers Tax) adds 20% on the fair market value of residential property purchased by foreign nationals, foreign corporations, or taxable trustees in designated BC regions. Both the Ontario NRST and BC Additional PTT apply in addition to the standard provincial LTT or PTT, compounding the acquisition cost substantially.

At the federal level, the Prohibition on the Purchase of Residential Property by Non-Canadians Act prohibits most non-Canadians from buying residential property in Census Metropolitan Areas and Census Agglomerations. In force since January 1, 2023, the prohibition was extended through December 31, 2026. Exemptions apply to work-permit holders with at least 183 days remaining validity, certain international students meeting specific residency and filing requirements, refugees, and purchases for development purposes. Properties outside CMAs and census agglomerations, and buildings with four or more units, fall outside the ban's scope. Non-compliance carries fines of up to CAD 10,000 and potential forced sale of the property.

Property tax obligations interact with income tax when rental income, capital gains on disposition, or changes in use are involved. A qualified tax professional with property expertise can identify which levies apply and confirm whether any filing obligations are outstanding, particularly for 2022-2024 UHT years. Browse the Canada tax-pros directory to find professionals experienced with Canadian real estate taxation.