It's property tax time here in Canada and anyone who owns a home in this country is required to pay property taxes. These taxes are paid to the city, municipality, region or district where our homes are located to help pay for our roads, policing, schools, fire protection, etc.
Did you know there are a number of payment options available that can help relieve the financial stress of paying your property taxes as one large bill each year? So the question is, when you receive your tax bill in the mail, How do you pay yours?
Annual lump sum
Homeowners sometimes prefer to pay a one lump sum for their property taxes, and this works if you are comfortable with shelling out that amount of money at once. To pay your tax bill, all you have to do is mail in a cheque or pay the bill electronically at your bank; and make sure to pay on time!
Your lender collects installments along with your mortgage payments
With this form of payment, your mortgage lender collects your municipal taxes and holds your monthly installments in a 'tax account' where once a year they'll pay your taxes for you. Paying your property taxes as a part of your mortgage payment can be classified as a convenience for some people or a requirement for others.
Municipal Pre-Payment Installment Plans*
The Tax Installment Pre-Payment Plan (TIPP) option is offered by most municipalities and consists of a monthly tax installment payment plan that allows property owners to make consecutive payments for their taxes rather than a single annual payment.
Depending on your municipality's guidelines, your payments may also be eligible to earn interest. Payments and interest earned are credited to the tax account each month. The accumulated credits are then applied against the balance due on the Property Tax Notice.
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