Property Tax Help For Low-Income Homeowners Who Are Seniors
The Ontario Senior Homeowners’ Property Tax Grant (OSHPTG) is a grant that some seniors are not aware of.
When we pay property tax as homeowners we are ensuring that many services in our community are looked after for us.
A small tax grant from the Ontario government might not seem like a big deal to some homeowners and perhaps it’s not.
However, for seniors who are low-income and struggling through their retirement with debt a $500 grant is a blessing.
There are many Ontario Tax Credits, Incentives, and Grants that you might not be aware of before filing your income tax return.
Today I’m focusing on the OSHPTG because I had only learned about it while researching my mother-in-law’s income tax return.
When you buy a house in Ontario the homeowner is responsible for paying property taxes to the city in which they live.
I never thought there would be such a rebate for seniors but I was wrong and want you to know about it.
Ontario Senior Homeowners’ Property Tax Grant
What is the Ontario Senior Homeowners’ Property Tax Grant?
The Ontario Scenarios Homeowners’ Property tax grant is for low to moderate-income seniors to help pay a portion of their property taxes.
You will not have to tax on the grant as is a non-taxable payment.
I want to point out that you do not have to be a Canadian citizen to get the Ontario Senior Homeowners’ Property Tax Grant.
You must reside in Ontario, own a home, and pay property taxes in order to be eligible to apply but only if you qualify.
Even a senior couple who owns a home and pays property tax but one of them is in long-term care you can still apply.
What this means is as long as one senior was living in the home during the income tax return period he/she may be eligible.
How The Death Of A Senior Affects The OSHPTG
Also, if the senior has deceased and you are POA you can still apply for the Ontario Senior Homeowners’ Property Tax Grant.
To be eligible the senior must have not passed away during the income tax year they are submitting for.
So for example, if you are submitting an income tax return for 2019 and the senior passed away in 2020 you can apply for the 2020 grant.
If the senior passed away during 2019 then they would not qualify as they did not reside in the home for the entire year.
The payment will be issued to the estate if they meet the qualifications.
Eligibility For The Ontario Senior Homeowners’ Property Tax Grant
To be eligible for the grant you or your spouse by December 31 of the last year must:
- You were a resident of Ontario
- Paid property taxes
- 64 years of age or older
- Owned and occupied a principal residence in Ontario
- Single-Divorced or Widowed and earned less than $50,000
- Married, Common-law with a combined income of less than $60,000
Ontario Seniors Homeowners’ Property Tax Grant Amount
If you qualify for the Ontario Seniors Homeowners’ Property Tax Grant you may be eligible for up to a $500 property tax refund.
The grant is based on your adjusted family net income.
Adjusted family net income – your family net income minus any universal child care benefit (UCCB) and registered disability savings plan (RDSP) income received plus any UCCB and RDSP amounts repaid.
For those who apply for the grant who are single, divorced, or widowed and their net income is more than $35,000 but less than $50,000 the grant will be reduced by 3.33% of income over $35,000.
For married couples and common law who have a combined family net income over $45,000, the property tax grant is reduced by 3.33% of anything over $45,000.
I know this doesn’t sound like much however every little bit counts when you are getting older and retired with little to no retirement income.
For those of you who have a family net income over $60,000 are not eligible for the Seniors Homeowners’ Property Tax Grant.
How To Apply For the Ontario Seniors’ Property Tax Grant
Simply fill out the Ont-BEN form along with the amount of property taxes you paid and file it with your income tax return.
I’m not sure how many senior homeowners know about this property tax grant which is why I wanted to talk about it.
I had no idea about it when filing my mother-in-law’s income tax return two years ago.
It wasn’t until I was doing research online about tax credits for seniors that I came across the Trillium Benefits and Property Tax incentive.
Even if you don’t owe income tax to the government you may still qualify for the grant so fill out the form.
The worst that will happen is that you have been declined the grant but at least you filled it out and submitted it.
How Will I Be Paid For The Ontario Seniors’ Property Tax Credit
Once you receive your assessment in the mail and if you qualify for the Ontario Seniors’ Property Tax credit you’ll receive it in 4 to 8 weeks.
The money will be directly deposited into your bank account and if you are not on the direct deposit system it’s a good idea to get set up.
Not only for this grant but for any other money to be received by the Ontario provincial government and Canada Revenu Agency.
We did this for my mother-in-law so we knew that what money she was getting back was a direct deposit that simplified everything.
If you choose not to set up a direct deposit your money will be sent by cheque which generally takes much longer.
How to sign up for direct deposit:
You can register For Direct Deposit two ways:
Property Tax Explanation
What are Property Taxes?
For those of you learning about the OSHPTG for the first time and own a home, you should already know what property taxes are.
For anyone else who may be a new homeowner understanding what property taxes are and how you pay for them.
Property taxes are ongoing taxes paid to the city and a financial obligation you can’t get out of and vary depending on where you live.
In short property taxes are to generate income for the city in which you live to pay for services needed to fund their operating budget.
The property tax is the tax that is based on the assessed value of your property.
Property Tax Uses
For example, your annual property tax rates pay for :
- Education *rates are calculated by the provincial government
- Keeping the city running and in good repair
When you’re looking to buy a home creating a mock budget will tell you whether you can afford the mortgage or not.
One of the most overlooked parts of homeownership is the carrying costs of owning the home which is paid to the city.
You might want to pay your city tax invoice all at once or most often it is attached to your mortgage payment to simplify payment.
As a homeowner, it is your obligation to make sure that your property taxes are paid on time or face late fees.
We used to pay our income tax costs manually but now they are automated payments since we no longer have a mortgage.
How Property Taxes Are Calculated
When you get your home assessment from the Municipal Property Assessment Corporation (MPAC) this number is included in the calculation of your property taxes.
The education tax rate which homeowners pay for kids to get an education whether you have kids or not.
Lastly, figures set by the city council called a residential tax rate that calculates the costs of running the city.
- MPAC Assessment
- Education Tax Rate
- Residential Tax Rate
These three items are factors into how much property tax you will pay each year.
For example, we pay around $5500 in property taxes each year which means we have to save $458.33 each month in our budget.
When you purchase a home you must factor in property taxes when calculating whether you can afford to buy a house.
As well, you may be shocked to find as homes appreciate that your property taxes increase right along.
A report by Zoocasa in 2019 shows the most expensive city for property taxes and the least expensive.
Managing editor Penelope Graham states in her article about Ontario Property Tax Rates 2019 that, “cities with the highest tax rates often have the lowest-priced real estate”.
The cities with the lowest property tax rates in Ontario
- Toronto: 0.614770%
- Markham: 0.659822%
- Milton: 0.685776%
- Richmond Hill: 0.688357%
- Vaughan: 0.696147%
Cities with the highest property tax rates in Ontario
- Windsor: 1.789394%
- Thunder Bay: 1.598484%
- Sault Ste. Marie: 1.529349%
- North Bay: 1.501246%
- Sudbury: 1.461888%
Seniors Don’t Leave Money On The Table
It’s important for seniors or those representing a senior who is unable to take care of their finances to research incentives.
As well, if you are filing the income tax return on their behalf and completing it on your own do some research.
Never assume that an income tax return is as it seems as there are many income tax deductions you can claim and incentives.
Whether you are filing taxes for a senior who qualifies for the Ontario Senior Homeowners’ Property Tax Grant or yourself don’t forget to include the form with your income tax submission.
I know I can find something to do with $500 and so can you.
When writing your legal will and designate a power of attorney (POA) inform them about doing research when they file your income tax.
There may be a time while you’re still alive but incapable of taking care of your finances and where the POA will step in.
Discussion: Were you aware of the Ontario Senior Homeowners’ Property Tax Credit? Have you applied for it before?
Note: If you live outside of Ontario contact your local government services to see what types of property grants may be available for seniors in your area.
As always go to the Canada.ca website or call Revenue Canada for more information or updated information from the date of this post.
Leave me your comments down below.