A new house or condo can be very exciting. If you're a first time homebuyer as well, that's doubly exciting. But as an owner of a new house or condo, there are also special challenges as well.
One of the things that an owner of a new house or condo must plan and budget for is the Supplementary Tax Bill. At the time of closing, the property is likely assessed as "vacant land" for the purposes of property taxes. Therefore, the first few property tax bills you receive only takes into account the value of the land, but not the value of the buildings or improvements made to the land.
About 12 to 18 months after title to the property is transferred to you, the Municipal Property Assessment Corporation (MPAC) will perform a re-assessment of your property, taking into account the value of the buildings or improvements made to the land.
Once the MPAC assessment is completed, you will receive a "Property Assessment Notice" in the mail, setting out the reassessed value of your property. A Supplementary Tax Bill will follow, using the reassessed value of the property and calculating the amount of property taxes owed from the date of occupancy. Depending on the type of building or improvement made to the land, the Supplementary Tax Bill can be many thousands of dollars. The due date for the Supplementary Tax Bill is also relatively short considering the amount payable, and can be as short as 90 days from the date the bill was issued.
It is very important that homeowners of new homes plan and budget for this expense.