Historical Residential Property Tax Rates in Ontario (1900–Present)

Property taxation has long been the backbone of local government finance in Ontario. This report traces the average residential property tax rate from 1900 to the present, highlighting how rates have changed over time and explaining major reforms and shifts in tax structure. All rates are typically expressed as a percentage of the property’s assessed value (often quoted in “mills” – dollars of tax per \$1,000 of assessment). We also note key policy changes (e.g. assessment methods, introduction of new taxes, provincial reforms) that affected how the property tax rate was determined in each era.

Timeline of Average Residential Tax Rates and Key Changes

Below is a summary timeline of residential property tax rate levels in Ontario, with representative data points and context:

Period	Approx. Avg Residential Tax Rate	Notes (Context & Reforms)
1900s (early)	5–6% (Toronto, 1900–1903)	Property tax sole local revenue; high rates in cities; assessments intended at market value. Local income tax introduced 1904 to broaden tax base.
1910s	~2–3% (est. province-wide)	Rapid urban growth but some industrial base sharing burden. WWI: federal income tax introduced 1917, but local property tax still dominant.
1930s	~2.9% avg (early 1930s)	Great Depression: property values down, mill rates up. Many areas 30–40+ mills. School taxes very high to keep schools open. Widespread tax delinquencies.
1950s	~1.5–2% (typical city) / 4.5% (Toronto 1955)	Postwar expansion. Some inflation unreflected in assessments, causing high nominal rates (Toronto’s city+metro rate 44.75 mills in 1955). Provincial grants to education increasing late 50s.
1960s	~1–1.5% (effective on market)	Many assessments outdated – nominal rates continue to rise, but effective burden moderate. By 1969 Toronto’s res. rate ~8–10% of assessment (city+metro+school), though this was on pre-1940s values). 1967: Ontario Committee on Taxation urges reform; 1970: Provincial Assessment Dept. created.
1970s	~1.5% (if on market) / higher nominal	Assessments frozen in many cases; Toronto 1975 nominal res. rate 12.33% of old assessment. Implied effective rate ~2% of true value. 1975: Province mandates res. rate = 85% of business rate. Numerous commissions propose market value assessment (no implementation).
1980s	~1.5% (varies)	85% residential ratio in effect. Some municipalities start reassessing (patchwork). 1985: Provincial report on property tax reform (no immediate action). Education still roughly half of property tax in many areas.
1990s (pre-1998)	~1.5% (urban), ~2% (rural/small)	High disparities: e.g. Metro Toronto homes with 1940s assessments pay low effective rates, newer suburbs pay more. 1993: Fair Tax Commission recommends overhaul. 1998: Major reform – current value assessment and uniform education rate introduced.
2000s	~1.2% (avg)	Post-reform, assessments updated regularly. Many cities initially set rates around 1%–1.5%. Education rate ~0.5% in 2000, gradually reduced to ~0.25% by 2006. Tax rate trends downward in high-growth areas (due to rising assessments).
2010s	~1.0% (avg)	Continued assessment growth. For example, 2016 provincial average ~1.08%. Toronto ~0.65%, Ottawa ~1.0%, mid-size cities ~1.2–1.4%. Provincial education rate around 0.17% by 2016.
2020s	~1.1% (avg)	Current (2025): Residential rates range ~0.75% (Toronto) to ~1.5% (small city). Education rate fixed at 0.153%. Some municipalities using small special levies (e.g. Toronto’s City Building Fund ~0.008%). Overall, property tax remains a vital local revenue, averaging ~4–5% of household income in Ontario.

(Sources: Ontario government reports and archives, cited below. Rates are approximate and expressed as a percentage of assessed value. Early-period “province-wide” averages are estimates; data for those years are drawn from major municipalities as proxies.)

Early 20th Century (1900–1930s) – Foundations and High Local Rates

In the early 1900s, property tax was virtually the only tax revenue for municipalities (no sales or income taxes at the local level). Ontario’s modern municipal tax system was established by provincial law in 1850, giving cities and counties the power to levy taxes on real property (land and buildings) and also certain personal property and incomes. By 1900, the tax base had narrowed mostly to real property, especially after the Assessment Act of 1904 eliminated taxes on personal property and instead mandated a local personal income tax to supplement property levies. This meant that after 1904 the “property tax” on residents was primarily on real estate value, with a small separate income-tax charge (though many municipalities found the income tax difficult to enforce and it was largely abandoned by the 1930s).

Property tax rates were relatively high in the early 20th century due to the heavy reliance on this single tax. In major cities like Toronto, combined city and school residential tax rates were on the order of 5.5–7% of assessed value in the 1900s. (At that time assessments were intended to reflect market value, so the tax was also a significant percentage of actual property value.) Smaller towns and rural areas generally had lower nominal rates because they offered fewer services, but they still depended on property levies for local needs (county roads, schools, etc.). By the 1920s, Ontario’s cities were growing and so were their budgets – property tax revenues in Toronto increased more than tenfold from 1880 to 1920, which put upward pressure on tax rates.

During the Great Depression (1930s), property values stagnated or fell, but local governments still needed revenue to fund services and schools. This led to very high mill rates in many communities. For example, one historical study noted that in the early 1930s an average mill rate of about 29 mills (2.9%) was applied in at least one province. In poorer areas the rates had to be even higher (exceeding 33–45 mills in some counties) just to keep schools open. Many Ontario municipalities faced tax delinquencies as unemployed homeowners struggled to pay – yet local councils often raised rates to compensate for the shrinking tax base. The result was a heavy burden on those who could pay; property tax was often viewed as onerous and regressive (unrelated to ability to pay) during these years.

Despite these challenges, property tax remained the primary funding source for local services. Importantly, the education portion of the property tax began to grow. Since the Common Schools Act of 1850, local school boards in Ontario had the authority to levy property taxes for education. By the 1930s, a significant share of every property tax bill was going to local public schools. The province provided only limited grants, so high school taxes, layered on top of municipal taxes, contributed to the high overall rates. In summary, the pre-WWII period saw residential property tax rates averaging roughly 2–5% in many parts of Ontario, with higher spikes in urban centers and during the Depression.

Mid-20th Century (1940s–1960s) – Postwar Growth and Assessment Challenges

The post-World War II era in Ontario brought economic growth, rising property values, and expanding public services (like roads, utilities, and health and welfare programs). Municipal and school spending increased, which in many cases drove property tax rates upward. However, rapid inflation and development in the 1940s–1950s often outpaced the updating of assessed values, meaning the posted “mill rate” had to rise just to keep revenue steady. (If assessments remained at pre-war levels, a higher rate was needed to tax the now more valuable real estate.) This led to a situation where nominal tax rates climbed steeply even if the actual tax burden relative to true market value did not increase as drastically.

For example, in the City of Toronto the residential mill rate rose dramatically in the mid-20th century. In 1950, Toronto’s tax rate (municipal portion) was on the order of 40–50 mills (~4% of assessed value). By the mid-1950s it was 44.75 mills, and it climbed to over 123 mills by 1970 on residential properties. (Commercial properties were even higher at 141 mills by 1970.) This tripling of the mill rate over two decades reflected both the lag in reassessments and the greatly expanded spending of local governments during the prosperous “Golden Age” of the 1950s–60s. Notably, Metropolitan Toronto was formed in 1953, adding a regional layer of property tax; Metro’s creation helped equalize services but also meant Toronto homeowners paid a Metro levy in addition to the city levy. By the 1960s, property tax bills were funding not just municipal infrastructure and services, but also a substantial share of education costs, welfare, and new amenities (parks, transit, etc.) across Ontario.

Several structural changes were introduced in this period to address inequities and burdens:

• Provincial Grants for Education: Starting in the 1940s and expanding in the 1950s–60s, the Ontario government increased grants to school boards to offset local costs. This was an attempt to relieve the property tax – which had been bearing nearly the entire cost of schooling. Even so, by the 1960s the education portion often consumed about half of the total residential property tax bill. (An official commission in 1977 noted that the “education tax burden” was hampering municipalities’ ability to fund other services.)
• Assessment Reforms: The Ontario Committee on Taxation (the Smith Committee) reported in 1967 on widespread inconsistencies in property assessment practices across the province. Different municipalities assessed property at different fractions of market value, and many had not reassessed in decades. This meant the same effective tax rate could appear very different in mill rate terms from town to town. In response, the province began moves toward centralized assessment to ensure uniform standards. In 1970, the Province of Ontario assumed responsibility for property assessment from the municipalities. A new provincial assessment department was tasked with updating property values more regularly and on a consistent basis. This set the stage for later province-wide revaluations.
• Classification and Differentiated Rates: As property values rose and more homeowners complained of tax burden, Ontario introduced differential tax treatment for certain property classes. Farmland and managed forests, for instance, were assessed at only a fraction of their value or taxed at reduced rates to support the agricultural sector (today, farm properties are taxed at 25% of the residential rate for municipal taxes). Likewise, multi-residential rental buildings and commercial/industrial properties were recognized as distinct classes. By the late 1960s, many municipalities were informally taxing businesses at higher rates than homes. This became formalized in the 1970s (see below).

Overall, the mid-century trend was that nominal residential tax rates increased (often well above 1% of assessed value, and in some cases 2–3% or more) as governments layered on services. However, these numbers must be viewed in context: actual market values of homes were rising fast, and assessments lagged, so a high mill rate did not always mean an exorbitant tax in proportion to true home value. Indeed, a 1977 royal commission found that in the early 1970s the property tax burden on homeowners (measured as a percentage of personal income) had actually stabilized or even declined, because incomes were rising and provincial aid to education had grown. Nonetheless, inequities were clear: similar houses could face different tax bills purely due to outdated assessments. This set the stage for major reforms by the late 1990s.

Late 20th Century (1970s–1990s) – Reform Attempts and Structural Changes

By the 1970s, Ontario’s residential property tax system was highly politicized. The province’s takeover of assessments in 1970 was supposed to lead to a switch to full market value assessments (so that posted tax rates would directly reflect percentage of current value). However, implementing market value province-wide proved contentious. Revaluations in the 1970s showed that homeowners would bear a much larger share of the tax if brought to true market values, because under old assessments many residences were undervalued relative to commercial properties. This led to pushback, and the government repeatedly delayed or phased in the changes. A Blair Commission (1977) and other expert panels recommended partial measures – for example, initially taxing homes at only 50% of their market value to soften the shift. In the end, no full reform was implemented in the 1970s, leaving the system largely as-is until the 1990s.

One important policy did emerge: Ontario legislated a “split mill rate” system to formalize lower taxation on residential properties. Starting in the mid-1970s, municipalities were required to set the residential tax rate at 85% of the rate on commercial and industrial properties (for the municipal portion of taxes). For the education portion, the residential rate was set at 90% of the non-residential rate. This 85%/90% rule essentially meant businesses paid higher property tax rates than homeowners on the same assessed value, codifying the practice of giving homeowners a break. The intention was to make the tax system more progressive and politically palatable. In practice, through the 1980s and 1990s, most Ontario cities had roughly a 15% lower mill rate for the residential class than for commercial/industrial properties. (For example, if a city’s commercial rate was 2.0% of assessed value, the residential rate would be about 1.7% under this policy.)

During the 1980s, the pressures to reform persisted. Property values had soared (especially in urban areas), but many assessments were still frozen at 1940s or 1950s values for single-family homes. This meant effective tax rates (tax as a share of true market value) varied widely. Some long-time homeowners in Toronto paid taxes equivalent to only 0.2–0.3% of their home’s actual market price (because their assessment was artificially low), whereas newer homeowners or those in municipalities that updated assessments paid a much higher effective percentage. This inequity led to the oft-quoted phrase that Ontario’s property tax system was “broken.” A provincial report in 1985 (the Goyette report) once again called for market value assessment and rationalizing tax rates.

By the early 1990s, average residential property tax rates in Ontario (on paper) ranged roughly between 1% and 2% of assessed value, depending on the municipality. For instance, in 1993 a typical Ontario city might have a residential rate around 1.5% (with businesses at ~1.8%) – though again, “assessed value” could be well below true value in some cases. The province-wide average residential tax levy per household in 1998 was about \$1,830, and Ontario had the highest per-household property taxes in Canada. But meaningful reform was imminent. In 1997, the provincial government (Premier Mike Harris’s administration) undertook a sweeping initiative nicknamed “Who Does What”. As part of this, major changes to property tax structure were implemented in 1998:

• Current Value Assessment (CVA) Introduction (1998): Ontario finally moved to a system of regularly updated market-based assessments for all properties. A new agency (the Municipal Property Assessment Corporation, MPAC) was created to provide annual assessments. The year 1998 was a “re-assessment year” in which most properties saw their assessed values adjusted closer to true market values. This allowed tax rates to be interpreted as true percentages of market value going forward, improving transparency. To prevent dramatic tax shifts, reforms were phased in (with assessment increases phased and caps on how much a homeowner’s tax could rise per year in some cases).
• Uniform Education Tax Rate: Crucially, the province removed the power of local school boards to set tax rates. Starting 1998, the education tax rate on residential properties became a uniform province-wide rate set by the Ontario government. Initially this rate was roughly 0.50–0.60% of assessed value in the late 1990s (combined with the municipal rate set by each city). The change meant that any difference in property tax burden between municipalities would now come only from the municipal portion, not from education differences. Over time, the uniform residential education rate was actually reduced – by 2024 it has fallen to 0.153% (approximately \$153 per \$100,000 of value), reflecting increased provincial funding of schools and assessment growth. The shift of school funding responsibility to Queen’s Park was a major structural change: it freed up some “room” on the property tax bill for municipalities (and indeed, the reforms also transferred some service costs like social housing to cities).
• Tax Ratio System: The old 85% rule was replaced by a more flexible tax ratio system in 1998. Each municipality was given starting tax ratios for different classes (residential = 1.0, multi-residential, commercial, industrial, etc., often >1.0). These ratios determine how the tax burden is split between classes. For example, a city might start with a commercial tax ratio of 1.5, meaning commercial property is taxed at 1.5 times the rate of residential. Provinces set guideline “ranges of fairness” for these ratios. In practice, the 1998 initial ratios were based on the existing 85% practice, so residential remained lower than non-residential. But municipalities gained some ability to adjust ratios over time (within limits) to shift relative burdens. The result in the years after 2000 was that in some cities the gap narrowed (commercial taxes eased relative to residential), while in others it stayed similar. For instance, as of the 2020s, Toronto’s commercial tax rate is about 3.0 times its residential rate, whereas some smaller cities have commercial only ~1.5–2 times residential.

Through the late 1990s, there were transitional caps and phase-ins to prevent sudden spikes in individual tax bills due to the new assessments. Many urban homeowners who had been under-taxed saw gradual increases, while some business classes saw relief. By around 2003, the new system largely settled.

21st Century (2000s–Present) – Modern Rates and Trends

Under the current system, all properties in Ontario are assessed at current value (with periodic province-wide reassessments, typically every four years, though the cycle was paused after 2016). Tax rates are set annually by municipalities based on budget needs, and the province sets the education rate. Because assessed values today generally reflect true market values, the tax rates can be directly understood as a percentage of a home’s market price.

Province-wide averages: The average residential property tax rate in Ontario in recent years is on the order of 1% of market value per year. In 2018, for example, the median effective tax rate in Ontario municipalities was roughly 1% (meaning a \$500,000 house would owe about \$5,000 in property tax). This average hides local variation: municipalities with high property values (and large commercial/industrial tax bases) can afford lower rates, while smaller or rural municipalities often have higher rates.

To illustrate, here are sample 2020s residential tax rates in different Ontario cities (municipal + education combined):

• Toronto: ~0.75% of value in 2025. Toronto’s 2025 residential rate was 0.754087% (which includes 0.5927% city, 0.153% education, and a small city building levy). For a home assessed at \$800,000, this yields about \$6,032 in tax. Toronto’s rate is relatively low – it has kept increases modest, relying on its broad tax base and other revenue.
• Mid-Sized City (Waterloo): ~1.27% in 2024. Waterloo’s residential rate for 2024 is about 1.2725%, which on a \$405,000 home translates to ~\$5,154 in taxes. This is closer to the provincial average; many GTA suburbs and mid-size cities fall in the 1.0–1.5% range.
• Smaller City (North Bay): ~1.62% in 2020. North Bay’s 2020 residential rate was 1.619120% (1.46612% municipal + 0.153% education). Smaller municipalities with less growth often have higher rates around 1.5–1.8%. Similarly, Windsor’s 2021 rate was ~1.8187% and Sarnia’s 2022 rate ~1.67%.
• Rural Areas: Farm properties benefit from the reduced tax ratio (0.25 of residential), so active farmland might effectively pay only ~0.2–0.3% of market value in tax. Rural residential rates vary by county but typically are around 1% or slightly higher, often including county and local township levies.

Over the 2000s and 2010s, property tax rates tended to decline in many cities even as tax bills rose, because property values were increasing faster. For instance, if a town’s property values doubled over a decade, the council could collect more revenue with a lower rate per dollar of assessment. Many Ontario cities saw their nominal mill rates drop significantly after 2000. In Toronto, the residential tax rate fell from about 1% in the late 1990s to around 0.6% by 2016, due to soaring real estate prices outpacing budget growth (Toronto then added a special levy, bringing it to ~0.75% in 2025 as noted). In contrast, municipalities facing stagnant assessments sometimes had to raise rates to fund services.

Another modern development has been tax credits and rebates. The province provides income-tested property tax grants (credits) to low-income seniors and others, effectively reducing the net tax paid by those who qualify. Some cities also offer vacancy rebates or charity rebates (funded by slight surcharges on other taxpayers, as Toronto notes for commercial classes). While these do not change the posted tax rate, they affect the effective rate experienced by certain taxpayers.

Conclusion

Over the past 120+ years, Ontario’s residential property tax rate has evolved from very high levels in the early 1900s to a more moderate, fairly uniform system today. In 1900, homeowners in Ontario’s towns and cities often faced effective tax rates of several percent of their property’s value – a reflection of heavy reliance on property levies in the absence of other taxes. Through the mid-20th century, rising public expenditures and irregular assessment updates caused nominal rates to climb (reaching over 100 mills in some locales by the 1970s), but provincial intervention gradually improved equity. Major tax reforms in the late 1990s – particularly the move to current value assessment and the province-wide education tax – brought transparency and consistency, resulting in today’s typical residential tax rate of around 1% of market value. This journey has been shaped by continual adjustments to tax policy: the introduction and removal of supplementary taxes, shifts in provincial funding responsibilities, and deliberate rate ratio policies to balance the interests of homeowners, farmers, and businesses. Despite periodic controversies, the property tax in Ontario remains a stable cornerstone of local finance, with a far lower rate today than a century ago, in part due to the broadening of tax bases (income and sales taxes) and provincial support that now share the overall tax burden.

Sources:

• Archives of Ontario – Fair Tax Commission Property Tax Working Group Report (1993)
• Enid Slack, Almos Tassonyi & Richard Bird – Reforming Ontario’s Property Tax System: A Never-Ending Story? (2007)
• Richard White – “Financing the Golden Age: Municipal Finance in Toronto, 1950 to 1975,” IMFG Papers (2016)
• R.D. Gidney & W.P.J. Millar – How Schools Worked: Public Education in English Canada, 1900-1940 (2012)
• Statistics Canada – Perspectives on Labour and Income, July 2003: “Property Taxes”
• City of Toronto – Property Tax Rates 2025 (official website)
• City of North Bay – Historical Tax Rates (2020)
• City of Windsor – Residential Tax Rates 2006–2024
• Ontario Committee on Taxation Report (Vol. III, 1967) (historical background on 1850 and 1904 reforms)
• Canadian Encyclopaedia / Canadian Tax Foundation archives (various tax history overviews)