3 Places With the Lowest Property Taxes in Canada

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These days, Canadians are seeking out any way of saving some extra cash, or making more of it. This might include moving. If you’re living in a high cost area such as the Greater Toronto Area, then it’s true that moving might be a great way to bring in some needed cash, and even save on lower property taxes.

So today, let’s look at how Canadians could potentially save money by moving to the lowest property tax locations in the country. And, importantly, whether it’s worth it.

First off, let’s get into property taxes

Understanding property taxes is key before we dive into a list of the lowest taxes in Canada. Property taxes are collected by cities and municipalities and can vary widely from one place to another. And that’s for a good reason. After all, the needs of one province or indeed one city may be incredibly different from another.

After your local government creates these property taxes, your taxes will come down to the assessed value of your home. Again, this is important. While the property taxes may not change dramatically, assessed value certainly can. Furthermore, it’s usually far less than what you pay for your home. That can be a good thing, but again depends on where you live.

For example, the exact same home in Toronto could still mean higher property taxes based on assessed value and local property taxes than a home in Regina. That’s why it’s important to identify how property taxes could affect your budget before purchasing a home.

The lowest property taxes in Canada

These points above are important when deciding where the lowest property taxes in Canada actually are. While the rate comes into play, it’s also important to consider the average value of a home. This will determine the average annual property taxes that Canadians pay out in the area. If there are lower assessed home values, then you may be paying less than others even with a higher property tax rate. So without further ado, here are the three cities with the lowest property taxes in Canada.

RankingLocationPropety Tax RateAnnual Property Taxes
1Victoria, BC1.14%$929.75
2Grand Falls-Windsor, NL1.17%$975.78
3Cornerbrook, NL1.21%$1,035.66

Now these are certainly great cost savings. However, before you pack up and move it’s important to note that this could mean several costly decisions. Finding a job in a new location could mean earning less money. Moving costs are to be considered. And more usually crop up. So instead, consider this strategy.

Invest in real estate

Instead of purchasing a new home, consider investing in the real estate sector instead. This could include real estate investment trusts (REIT). These provide superb dividend payments, and exposure to numerous real estate sectors, often diversified as well.

A great option to consider is Canadian Apartment Properties REIT (TSX:CAR.UN). CAPREIT is a strong choice with shares actually doing quite well this year. It makes sense, given that rent is on the rise, with purchasing homes more on the decline.

However, this situation is likely only to expand in the years to come. What’s more, CAPREIT is a diversified investment that has a long history of growth. You can grab a 3.24% dividend yield as of writing, with shares up about 7% in the last year as of writing as well.

So while it might be interesting to see what others are paying in property taxes, and even disheartening, don’t lose heart. Instead, find ways of creating more income from investments such as CAPREIT. If done properly, these will provide far more long-term income than moving ever could.

The post 3 Places With the Lowest Property Taxes in Canada appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.