If you’re thinking about buying a home or investing in real estate in Canada, understanding how property taxes work in each province is a crucial step. While Canada doesn’t have a federal property tax, each municipality and province sets its own rates — which means the amount you pay can vary dramatically depending on where you live.
This 2025 guide breaks down how property taxes are calculated, how they differ by province, and what that means for your budget and investment strategy.
What Are Property Taxes and Why Do They Matter?
Property taxes are annual fees paid by homeowners to fund essential local services like schools, road maintenance, police and fire departments, and waste collection. The amount you owe is based on:
- The assessed value of your home (determined by your municipality)
- The property tax rate set by your local government
- Any rebates or exemptions available in your province or city
Taxes can be paid all at once or in installments throughout the year — and they’re a major ongoing cost of owning a home.
2025 Average Property Tax Rates by Province
Here’s a snapshot of average tax rates and what you might pay annually on a $500,000 home:
| Province/Territory | Avg. Tax Rate (%) | Tax on $500K Home | Key Notes |
|---|---|---|---|
| Alberta | 0.87% | $4,350 | No PST; moderate rates |
| British Columbia | 0.64% | $3,200 | Low rates, high home prices |
| Ontario | 1.00%–1.30% | $5,000–$6,500 | Varies by city (e.g. higher in Toronto) |
| Manitoba | 1.30% | $6,500 | Among the highest in Canada |
| Saskatchewan | 1.15% | $5,750 | Affordable housing, moderate tax rates |
| Quebec | 0.98% | $4,900 | Includes municipal and school taxes |
| Nova Scotia | 1.10% | $5,500 | Higher in rural areas |
| New Brunswick | 1.25% | $6,250 | Two-tiered system (local + provincial) |
| Prince Edward Island | 1.05% | $5,250 | School and land transfer levies |
| Newfoundland & Labrador | 1.00% | $5,000 | Some cities charge separate utility fees |
| Northwest Territories | 0.63% | $3,150 | Low rates, but limited inventory |
| Yukon | 0.68% | $3,400 | Lower property values help affordability |
| Nunavut | 0.59% | $2,950 | Lowest average rate in Canada |
Note: Actual rates vary by municipality and property type.
How Property Tax Is Calculated
The basic formula is:
Assessed Property Value × Local Tax Rate = Annual Property Tax
Example:
If your property is assessed at $600,000 and your city’s tax rate is 1.1%, you’ll pay $6,600 in property taxes that year.
Other factors that may affect your final tax bill include:
- Local mill rates
- School board levies
- Special infrastructure assessments
- Zoning and property type
Highest and Lowest Tax Provinces (2025)
| Rank | Province | Tax on $500K Home | Known For |
|---|---|---|---|
| 1 | Nunavut | ~$2,950 | Lowest rates; limited urban housing |
| 2 | British Columbia | ~$3,200 | Low rates; high property values |
| 3 | Alberta | ~$4,350 | No PST; stable job market |
| 11 | New Brunswick | ~$6,250 | Dual tax system (local + provincial) |
| 12 | Manitoba | ~$6,500 | Highest average rates in Canada |
Provinces Offering Property Tax Rebates or Credits (2025)
- Ontario: Property Tax Credit for seniors and low-income households
- British Columbia: Home Owner Grant for primary residences
- Quebec: School tax reductions for families and first-time buyers
- Alberta: Seniors’ Property Tax Deferral Program
- Nova Scotia: Rebate for senior homeowners with modest incomes
FAQs: Property Taxes in Canada by Province
Q1: Which province has the lowest property tax in Canada?
A: As of 2025, Nunavut has the lowest average rates, followed by British Columbia and the Northwest Territories.
Q2: Do property tax rates vary within a province?
A: Yes. Property tax is set at the municipal level, so rates can vary significantly between cities and towns.
Q3: Can I appeal my property’s assessment?
A: Yes. Each province allows homeowners to dispute their property’s assessed value if they believe it’s inaccurate.
Q4: Are investment properties taxed differently?
A: Often, yes. Some municipalities charge higher rates or offer fewer exemptions for non-owner-occupied homes.
Q5: Are there any property tax benefits for first-time buyers?
A: While property tax rebates are limited, first-time buyers can access programs like the FHSA and land transfer tax rebates, which help reduce overall homeownership costs.
Final Thoughts
When budgeting for a home or investment property in Canada, don’t overlook property taxes — they can significantly affect your long-term costs. Provinces like Alberta and British Columbia may offer lower rates, but you’ll want to factor in home prices, local services, and potential rebates too.
The bottom line? The cheapest home isn’t always the cheapest to own. Take the time to research how property taxes work in your target city — and plan accordingly.
Buy smart. Budget wisely. Know your taxes.
