Do Ottawa residents really pay more property tax?

Recently, I wrote about a Twitter exchange between a Capital Ward candidate and Trevor Hache of the Healthy Transportation Coalition. There was one part of that conversation that has continued to stick with me…not because it was wrong, necessarily, but because I thought it deserved more investigation.

Here’s what was said:

This wasn’t the first time I’d hear this…but I also remembered that Francois Trepanier who’s running in Innes Ward saying that Ottawa residents pay less than Torontonians. So, I decided to track this stuff down, myself.

I found this report from Global news detailing how much people in different cities pay. I believe I saw someone tweet this out around the same time as Carricato’s tweet.

I’m going to steal the pertinent graph:

Okay, the numbers check out…but do you see anything peculiar about the measurement? It tells us how much a resident pays in relation to the price of their home.

This is a pretty significant detail, because the price of your home doesn’t actually dictate the cost of city services you require. If your home doubles in price overnight, the cost of the sewers connecting to you home remain unchanged.

But the Global report had more useful information in it, like average home price. Let’s take a look at Toronto, with such a low rate of property tax.

In Toronto, the average price of a home is $805,320. In Ottawa, it’s $425,398.

All right, time for some quick and dirty math.

If you buy the average home in Toronto, you’ll pay $805,320 for the privilege. The city will then charge you $6.62 per every $1000 for the value of your home.

So the property tax bill for the average Toronto home will be $5,331.

Back here in God’s country, you’re paying $425,398 for the average home, and those scoundrels at City Hall are taking $10.68 for every $1000 you spent on your home.

So the property tax bill for the average Ottawa home will be $4,543.

(If anyone sees a problem with my math, please let me know.)

So the owner of the average house in Ottawa will be paying $788 less than the owner of the average house in Toronto. Or, to put it another way, the average house in Toronto will cost you 17% more in property taxes.

You see, when we get into real numbers, Ottawans appear to pay less than Torontonians (at least, judging by the same metric as the original tweet). Further, as the Global report shows, Ottawa’s land transfer taxes are significantly lower in terms of rate and in real dollars than Toronto’s.

Further, according to the 2010 census (yes, it’s old, but it’s the first source I found), Ottawa has a significantly higher average household income than Toronto. And, let’s not ignore the fact that Toronto is far denser than Ottawa, meaning that many city services will be cheaper there…so it’s not even clear that we should have a tax burden lower than Toronto.

Now, there are a lot of other elements at play, here. There’s the issue of rentals. There’s the dispersal of home prices and incomes. So, no, this isn’t an exhaustive investigation into the relative property tax burden of Toronto and Ottawa.

But one thing that is clear is that you can’t take the reported numbers and simply state that Ottawa has an unreasonably high tax burden compared to a city like Toronto, because, as it turns out, in terms of real dollars (which is what people really care about at the end of the day), the tax burden for an average Ottawa home is lower than that for an average Toronto home.

One other thing that’s clear: that report should not be used to determine financial matters in Ottawa.

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One thought on “Do Ottawa residents really pay more property tax?

  1. Pingback: Capital Ward Debate Re-cap | Steps from the Canal

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