Do Condo Fees Include Property Tax in Canada?

If you’re thinking about buying a condo in Canada, one of the main areas of concern is- do condo fees include the property tax in Canada?

We’ll cover all the answers about condo taxes in this article. This post will focus on assisting you in understanding property taxes so that you do not pay the government a higher amount than you’re supposed to.

Most condo owners pay a monthly mortgage payment that includes a condo property tax split into 12 equal portions. Like any typical homeowners, condominium owners must gather property details for their tax filings.

On the other hand, new condo owners and residents may be unsure how condo property taxes differ from other types of real estate.

Condo Fees vs Property Tax

The condominium corporation charges condo fees to manage the day-to-day operations of the facility as well as to pay for future repairs and renovations.

In contrast, property taxes are levied by cities and counties to fund city and county operations along with any future maintenance and renovations.

Condo fees appear to be quite similar to a tax imposed on the condominium. But that’s where the resemblance ends. Because the two groups are unrelated, they cannot accept payment from one another.

You can’t pay your property taxes and your condo fees at the same time. This means that you can’t pay the property taxes to the condo association, either. It’d be like paying your groceries bill with your transportation bill – the two are unrelated.

Property taxes are occasionally combined with the mortgage payment. Banks sometimes pay in advance and bill you later. You can verify with your mortgage broker or bank to check whether this is the case. Just don’t assume they’ve been paid and neglect to save for them.

Things that Condo Fees Cover

Do condo fees include utilities? Yes, condo fees do include your utilities along with common areas and the reserve fund.

Let’s dive a little deeper into this.

Water, electricity, and heat are all included in your condo fee, but this isn’t always the case. The more modern condominiums have individual heating systems that you are responsible for maintenance and payments. Before you buy a condo, be sure you understand the fees.

And don’t forget about those fantastic perks that your family or friends enjoy when they visit? You must help with their maintenance. Your condo costs will be greater the more facilities your property has. For instance, ask yourself whether you’ll actually use a pool, sports court, hobby room, house theatre, or gym because you’ll be paying for them.

Snow and waste removal, common area cleaning and minor repairs, external window washing, and other expenses are also parts of condo fees.

Do Condo Fees Include Property Tax in Canada?

When purchasing a condo, you should pay attention to more than just the sales contract. Your property tax liability should also be taken into consideration. Every house or condo you buy has different and unique property tax information.

You may wonder why this tax exists.

Like other Canadian taxes, your condo property tax goes to the local government to help meet the community’s needs and provide services. A few examples of these services are garbage collection and sanitation, fire safety, and public space preservation.

Property taxes are, of course, a significant factor for anyone considering investing in real estate. And when it comes to paying property taxes, you will have to fill out the payments for your condos separately. The municipality collects property taxes. Thus, condo fees never include them. The management agency usually receives your condo payments.

Conclusion

So, the underlined outcome of the discussion is that the fee you pay to buy the condo does not include the property taxes. That is because you’re paying the condo fees to the management company involved in the process. And you’ll be paying the property taxes to the municipality.

Remember that if you don’t live on the property, you can’t claim the principal residence exemption. This exemption exempts Canadian residents from paying capital gains taxes on increases in the appraised value of their entire property.

Hence, it’s critical that you thoroughly examine all of the data before considering acquiring a condo. This covers the price of making the transaction, and particularly taxes.

FAQ

Many of the expenditures of house owners will be covered by your condo fees. On the other hand, your property taxes are paid to the City of Edmonton. Thus, they are not included in your condo fees.

As a condo owner at Townhouse, your condo fees will cover expenditures such as water, waste, sewage, and shared amenities. A portion of the fees goes toward establishing a reserve fund, which will be utilized for larger complex maintenance and repairs.

Removing snow, maintaining utilities and lawns, and common property repairs are all responsibilities of condo corporations and are included in condo fees. They must also cover the common property’s insurance and administrative costs (such as accountants and lawyers).

Yes, you will have to pay property taxes on a condo in Canada. If you have bought a new condo, reach out to your municipality to know the amount of property taxes you should pay. Or you can use a condo property tax calculator to figure out the expenses.

Condominiums are perfect for people who intend to downsize from large houses. The condo fees cover utilities, common area maintenance, and other reserve funds. So, it might just be worth it for you.