Investing in property in today's economy has been a focal point for everyone, including investors, people looking to upgrade, or even couples planning to start their families.
Many people support investing in real estate as soon as possible as they have experienced and seen the benefit of appreciation. The question in hand is - is every property a good investment? Currently, there are a lot of things that are changing, including interest rates, home values, and property tax increases.
Property Tax Increase
Announced at the beginning of January 2023, there will be a 5.5% increase in property taxes. However, before we explore what this means for homeowners, let's define property tax, specifically how it is broken down in Toronto.
Property tax is a levy based on the value of the property. There are two main parts:
Municipal portion established by each municipality and the
Education portion, which are rates established to help fund Ontario's elementary and secondary education systems.
So for an average-priced home assessed at around $700,000, their property tax bill can be an additional $235 due to the property tax increase. However, keep in mind that Toronto will also see a 3% increase in tax for the usage of water, wastewater, and solid waste rates as well.
All these increases are occurring to offset the pressures of inflation in the upcoming year.
Is it Worth it?
With the recent increases in taxes towards owning property on top of all the other known challenges, the question that is still posed is - Is it worth investing in property in Toronto?
The answer is yes; however, ensure you do it correctly whenever you invest in real estate. Do your research, look into the location, see what amenities are nearby, and even compare the prices to properties within the area.
In addition, define the purpose as to why you are investing, what your long-term goals are, if you plan to rent it out, etc. Since the real estate market is unpredictable, timing the market will always be a difficult challenge; however, with the proper research, you can minimize those risks.
If you are still trying to decide whether to invest in real estate in Toronto because of all the increased costs, at Pal Property Solutions, we provide expertise in Canada and The United States.
Looking Into Investing in Property?
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