Paying Property Taxes

[aleksandram]

My husband and I just bought our first house and we are a little confused about how the property taxes should be paid.

Just a few Questions:

-If our Property taxes are affixed to our mortgage payment, is interest collected on this as well?

-Should we want to pay the taxes ourselves how would we go about doing this?

-What is the best way to pay the taxes without them acrruing interest?

TIA

[nalababe]

For annual property tax, we just pay online via our bank....

[HighFlyer]

I have mine set up on pre-authorized payment.

[don242]

My husband and I just bought our first house and we are a little confused about how the property taxes should be paid.

Just a few Questions:

-If our Property taxes are affixed to our mortgage payment, is interest collected on this as well?

-Should we want to pay the taxes ourselves how would we go about doing this?

-What is the best way to pay the taxes without them acrruing interest?

TIA

Let the bank know you want to pay the taxes yourself. This usually isn't a problem. Then you will receive the tax bill directly from the city. Pay be the due date and you are fine.

[gman]

Some people like to pay the property tax through the mortgage payment. I prefer to pay that myself. If you need to challenge the tax with the city, it is pain of the back end to deal with city with the bank in the middle.

[Whitedart]

My husband and I just bought our first house and we are a little confused about how the property taxes should be paid.

Just a few Questions:

-If our Property taxes are affixed to our mortgage payment, is interest collected on this as well?

-Should we want to pay the taxes ourselves how would we go about doing this?

-What is the best way to pay the taxes without them acrruing interest?


Are you asking if the bank collects interest on the tax payment portion of the mortgage payments? I suspect they would be for the first couple of years of payments. Normally a tax fund would be built up, and the bank would pay the taxes twice a year when billed from that fund. Once a fund is built up, there should be no accrued interest to you, but I don't know if the lender will pay you any interest on any extra money in the tax fund.
Tax arrears take priority over a mortgage if there is any type of foreclosure, so the bank has a very strong interest to see that the taxes are fully paid.

To pay them yourself, speak with the lender. There may have been a clause in your contract that gave the lender authority to manage the tax payments, given that this is a a first house purchase, and a first mortgage. So they may not allow it present. Something you may have to look at when a mortgage renewal comes up.

The best way to avoid accruing additional interest with the lender would be to pay the taxes yourself. Just make sure they are paid on time when due. In Mississuaga, late payment penalties start at 1.25% on the first day late, and then 1.25% on the first day of each calender month late, so these penalties can add up very quickly.

[movieman]

Some people like to pay the property tax through the mortgage payment. I prefer to pay that myself. If you need to challenge the tax with the city, it is pain of the back end to deal with city with the bank in the middle.

Yeah, our bank had no problem with us paying the tax ourselves. Of course with the downpayment we gave, we could not pay tax for twenty years and they'd still get their money back if they had to repossess the house.

An acquaintance had been paying tax through their bank for a year when they discovered that the bank had forgotten to actually pass the tax money onto the city, and that put us off the whole idea :).

[sillysimms]

I would only consider paying property taxes with a mortgage if you're not good at all about keeping track of payments.

Other than that, I prefer to pay my property taxes myself. I do direct debit (in Mississauga) and the property tax comes out of our account automatically on the 1st of the month.

[kenchau]

I never even knew paying property taxes through the mortgage payments existed as an option. never the less, had I known, I still would have opted to pay the taxes myself.

[babysham]

I pay them myself as well so I can keep a track of how much property tax I'm paying...

[Frankie3s]

I pay them myself as well so I can keep a track of how much property tax I'm paying...

True but does it really matter? The city tells you how much they want and you have no recourse but to pay it. Disagree to pay and they will eventually take your house. Quite simple.

[penf]

True but does it really matter? The city tells you how much they want and you have no recourse but to pay it. Disagree to pay and they will eventually take your house. Quite simple.

It matters to the bank if you have a mortgage with them and you stop paying property taxes to the city.

[gman]

True but does it really matter? The city tells you how much they want and you have no recourse but to pay it. Disagree to pay and they will eventually take your house. Quite simple.

Yes, because you may dispute the value of your property with the City. With the bank in the middle, it is that much harder. Also, it often has a time delay which may affect your ability to dispute it (such as pass the deadline).

[Wonderdollar]

My husband and I just bought our first house and we are a little confused about how the property taxes should be paid.

Just a few Questions:

-If our Property taxes are affixed to our mortgage payment, is interest collected on this as well?

-Should we want to pay the taxes ourselves how would we go about doing this?

-What is the best way to pay the taxes without them accruing interest?

TIA

Based on the financial institution you have your mortgage with and also based on the down payment you made, the lender may or may not give you an option of paying the property tax directly by you or to be paid by the financial institution on your behalf and collecting the payments from your account with the mortgage.

The bank would keep a separate account for the property tax payments and would generally make the payment to the city twice in a year but would take the payments out from your account on the scheduled mortgage payment date. Also, depending on the time of year the closing has taken place, the bank may ask you to pay extra tax amount for the first installment and later on revert to the fix amount with every mortgage payment. Some bank would even pay you some interest on the balance in the property tax account.

The bank would also send you an annual statement in the beginning of the year showing how much amount deducted in mortgage payments, interest charged, property tax collected and remitted on your behalf in the previous year.

[Whitedart]

Yes, because you may dispute the value of your property with the City. With the bank in the middle, it is that much harder. Also, it often has a time delay which may affect your ability to dispute it (such as pass the deadline).

In Ontario, the value of the property is determined by MPAC (Municiapl Property Assessment Corporation) and not the city. The city applies the same mill rate to all residential properties based on the value received from MPAC. MPAC assessment notices are usually sent out once a year in January to the property owner. That notice explains how to appeal the assessed value.

[jeeva86]

A bit OT, but why can't certain bills be paid via CC? Such as this, gas, hydro and water. Pretty much anything associated with the gov't.

[sillysimms]

A bit OT, but why can't certain bills be paid via CC? Such as this, gas, hydro and water. Pretty much anything associated with the gov't.

Merchants that decide to accept credit cards have to pay fees to the credit card company. A percentage of each credit card transaction would have to be paid to the credit company by the government if they accepted credit cards which would be lost revenue for the government.