Friday, 1 November 2013

Property Tax Cost of Living Comparison

A quick discussion on Twitter about relative property tax rates between Edmonton AB, London ON and Cambridge ON started me wondering, what do these various property tax rates mean to a homeowner's bottom line? Property taxes are a tax calculated using a rate and the assessed value of a home. What determines their affordability is your income. Ideally you want to live in an area where your property taxes are low, the house prices are low and the incomes are high.

Using publicly sourced data, I compiled a quick comparison using average/median income (Yes I know there's a difference, I couldn't find a consistent source and had to use both as equivalent. First dose of salt alright?), average home prices and available tax rates. All of these sources have caveats as the numbers may not have been all reported or collected in the same manner. The cities chosen reflect ones that I could find information for.  All source data and my calculations are available here.

Now that the list of caveats is done, lets start where we can make the big bucks; cities sorted by average or median income (click images to embiggen)

Out of cities listed, the top three are Calgary and Edmonton AB followed by Cambridge ON

Now where are the cheaper places to buy?

Fredericton, NB followed by Windsor and London, ON

Interesting, so what are the property tax rates?

Whoa. So Fredericton and Windsor are looking bad all of a sudden. But percentages aren't dollars.

Applying those tax rates to home values really changes the chart. But remember the income chart? How affordable are these taxes?

Well S.O.B. As a Cambridge resident, I may want to consider moving....

*Note: Huge caveat to these calculations. I calculated the property tax by simply multiplying the tax rate and the average home value. Municipalities do not use that calculation and they use an assessed home value, not the current resale values. So remember figures don't lie, but liars can figure.

Update: Via Jesse Helmer I learn of the BMA Municipal Tax Study The numbers on page 12 indicate that my quick analysis might be on target.

1 comment:

Anonymous said...

Two of the determining factors of how it can affect what an individual will pay for this type of tax are where you live and a person's economic condition. about property records