Skip to main content
carrick on money

At a time when many homeowners are bracing for mortgage renewals at much higher rates, Toronto city staff have presented a budget with a 10.5-per-cent property-tax increase.

The increase, if approved, could easily add $500 to $1,000 or more to the annual cost of property taxes in Toronto. For specifics, try a calculator on the mortgage website Wowa that shows the amount of taxes residents pay based on either assessed value or fair market value.

It’s easy to say Toronto residents can afford the increase, which could end up even higher if the city does not secure funding from the federal government to support refugees. After all, the average home price in the city in 2023 was $1.1-million. Even if you have a big mortgage on a Toronto home, aren’t you well off in terms of household wealth?

For “on-paper” calculations like net worth, the answer is yes if you have a lot of equity in your home. But in day-to-day living, housing wealth is not very helpful. A home that has risen in value does not help you pay your mortgage, or home ownership costs such as property tax, insurance, utilities or maintenance. Mortgages are a particular concern right now because a wave of renewals will happen this year at much higher rates.

You can tap into the equity in your home, but it’s expensive and thus not something to rely on for paying monthly household costs. A home equity line of credit can cost a few hundred dollars to set up, and the interest rate is high these days at around 7.7 per cent. Seniors have the additional option of a reverse mortgage, with rates at comparable levels.

There was a brisk discussion about whether Toronto homeowners can afford a 10.5-per-cent property-tax hike on the social media platform X last week. The view that Toronto homeowners are wealthy by virtue of owning a home in the city faced off protests that there’s a limit to how much homeowners can bear.

The reality here is that you can be rich on paper if you own a home in Toronto, but that won’t help you pay an increase of $500 or more per year in property taxes.

One final note on property taxes is that they’ve been rising in cities around the country. It turns out neither the federal nor provincial governments are to be feared nearly as much as cities for increasing the tax burden on households managing the impact of two years of inflation and high interest rates.

Subscribe to Carrick on Money

Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.

Rob’s personal finance reading list

How to have a no-spend weekend

Advice on how to have a weekend where you don’t spend any money. The trick, it seems, is to plan ahead without spending a lot of money doing so.

Does your adviser really know you?

This article aimed at investment advisers talks about how important the personal touch is in keeping clients happy. It made me wonder, how many people feel their adviser knows them as people – their personal situation and preferences? If you feel invisible as a client, better advice is out there.

Getting to know DINKS and HENRYs

A look at two popular personal finance acronyms of the moment – DINKS, which stands for double income, no kids; and HENRY, which stands for high earner, not rich yet.

Dirty money

All about the Bank of Canada’s legit money-laundering activities – cleaning dirty or mangled bank notes. Most of this work is done for the public, but also banks and police. The author of this piece is Dean Beeby, a freedom-of-information specialist who long ago was my editor in the business department at The Canadian Press. One of the smartest editors I’ve worked for.

Ask Rob

Q: I’ve been getting periodic e-mails from my credit card provider offering me an increase to my credit limit. I pay my balance in full monthly and I don’t really need the increase but I’m wondering if it’s something that should be accepted just in case the need arises. Your thoughts?

A: You sound like you have your finances nailed down, which suggests you have resources beyond a credit card in case of a financial emergency. Can’t see a reason to raise your limit if you don’t need the extra spending room.

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.

Tools, explainers, guides and charts

How to choose between the family and individual option for registered education savings plans, or RESPs. We had a family plan for our two boys and it worked well.

The Money-Free Zone

I just caught up with the 2023 song Nobody by Black Belt Eagle Scout, a.k.a. Katherine Paul, an Indigenous alt-rock singer. Dreamy vocals and power guitar really come together here.

Watch this

A news report on houses in Carleton Place, Ont., that are being sold for $400,000 less than they were listed at a few years ago, at the peak of the market. Carleton Place is a short drive west of Ottawa.

On social media

An Instagram slideshow on where home prices in Canada have dropped the most recently.

What I’ve been working on

More Rob Carrick and money coverage

Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.

Even more coverage from Rob Carrick:

Go Deeper

Build your knowledge

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe