When you buy a house in London, the price on the listing is not the end of the money story. Every year after that, you pay property tax to the City of London. It is one of the biggest ongoing costs of owning a home, and it surprises many first-time buyers twice. First, the bill is bigger than they expected. Then, when they look closer, they find out the bill is not based on what they paid for the house at all.
This article explains it in plain words, with real London numbers, so you can budget for it before you buy, not after.
What is property tax, in plain words?
Property tax is a yearly bill you pay to your city for owning property there. Think of it as your share of the cost of running the city. It pays for things everyone in London uses: roads, snow plowing, police, fire services, parks, libraries, and buses. A smaller part of it goes to schools. You pay it every year for as long as you own the home, whether your mortgage is finished or not.
It is not the same as land transfer tax. Land transfer tax is a one-time tax you pay when you buy the home. Property tax is the yearly bill that keeps coming after you move in.
How is your bill calculated? Two numbers, from two different offices
Your yearly property tax comes from one simple formula:
Assessed value x tax rate = your yearly property tax
Two different offices supply the two numbers, and that matters:
1. The assessed value comes from MPAC, the Municipal Property Assessment Corporation. MPAC is the provincial office that puts a value on every property in Ontario for tax purposes. That value is called the assessed value. It is not the price you paid, and it is not what your home would sell for today.
2. The tax rate is set by the City of London every year, when City Council approves its budget. The rate has two parts: a city part, which pays for city services, and a school part, which is set by the Province of Ontario and is the same 0.153% for every home in the province in 2026.
For a regular house in London, the combined 2026 rate is about 1.73% of the assessed value. That number changes a little every year, because the city sets a new rate with each yearly budget. In 2026, London's budget raised property taxes by 3.6% over the year before, which works out to about $160 more per year for the average household, including water and wastewater charges.
The big surprise: your 2026 tax is based on what your home was worth in 2016
Here is the part almost nobody knows. Your property tax is not based on what your home is worth today. In Ontario, the assessed value is still frozen at January 1, 2016. The province was supposed to update all values in 2020, but that update was postponed during the pandemic, and it has been postponed again and again since then. So the 2026 tax year still uses values from January 1, 2016, and no new update date has been announced.
That matters a lot, because average home prices in Ontario have risen about 91% since 2016. In other words, homes are worth roughly twice what they were worth when the tax values were set. A home that sells in London today for $600,000 may still have an assessed value in the $300,000 to $400,000 range. Even a brand-new home is assessed at what it would have sold for back in 2016.
So when you look at a listing and see the yearly property tax, that number is based on an old value, not on the asking price. That is usually good news for the buyer, because the tax is lower than it would be if it were based on today's price.
A real London example, with the math shown
Let us use a typical London home. Say the home sells for $553,164, which was the median sale price in the city of London in October 2026. Say its MPAC assessed value is $350,000, which is a normal range for a home at that price.
The math is:
$350,000 x 1.73% = about $6,045 per year, or about $504 per month.
Now compare that with what the bill would be if the tax were based on the price you paid:
$553,164 x 1.73% = about $9,554 per year, or about $796 per month.
The difference is about $3,500 per year. That is the size of the surprise, and in this case it works in the buyer's favour, because the tax is based on the older, lower value.
Two warnings, so you budget honestly. First, the assessed value is different for every house, so you cannot guess it from the sale price. Always check the actual assessed value and the actual tax bill for the specific home before you buy. Second, the rate changes every year with the city budget, so last year's number is a guide, not a promise.
Where does the money go?
Most of your property tax stays in London and pays for city services: roads and snow clearing, police and fire, parks, libraries, and public transit. The smaller school part, 0.153% in 2026, is set by the province and goes to education. That is why two houses with the same assessed value in the same city pay the same tax, and why the same house would have a different tax bill in a different city, because every city sets its own rate.
When and how do you pay?
The City of London sends your tax bill in two parts each year. The first bill, called the interim bill, is mailed on January 31, 2026, and covers roughly the first half of the year. The final bill covers the rest, and it is due in three installments: June 30, August 31, and October 30, 2026.
You can pay the city directly, in those installments. But many buyers never see a separate tax bill, because their lender collects the tax for them. In many cases, the bank adds about one twelfth of the yearly tax to your monthly mortgage payment, holds it aside, and pays the city when the bill is due. That is one reason your lender looks at property taxes when it decides how much house you can afford. The tax is part of your real monthly cost, not an extra on top of it.
One thing to take seriously: if a payment is late, London charges a penalty of 1.25% on the amount still owed, starting on the first day you miss the due date, and again on the first day of each month after that until it is paid. A missed bill gets more expensive fast, so it is worth setting up automatic payments or letting your lender collect it monthly.
What if you think your assessed value is too high?
You can challenge the assessed value, but you cannot challenge the tax rate. The rate is set by the city, and nobody can appeal it. The value is a different story.
If you think MPAC's value for your home is too high, the first step is free: you can file a Request for Reconsideration with MPAC, asking them to review the value. The deadline is usually March 31 of the tax year, and the exact date is printed on your Property Assessment Notice. If you are still not satisfied after that review, you can appeal to the Assessment Review Board, an independent tribunal.
Be honest with yourself before you appeal. The test is not whether your assessed value is lower than today's market price, because it almost always is. The test is whether your value is high compared with similar homes in your area, based on 2016 values. And one more honest fact: lowering your assessment changes your share of the city's total tax bill, not the city's total. The city still collects the same amount overall, so if one home pays less, the others pay a little more. An appeal helps you only if your home is truly overvalued next to similar homes.
Three things to do before you buy
First, look up the home's assessed value and its actual tax bill before you make an offer. You can see a property's profile for free on MPAC's website, AboutMyProperty.ca, and your realtor can show you the current tax bill for the home. Do not estimate the tax from the asking price, because the asking price is not what the tax is based on.
Second, ask your lender and your lawyer how the tax will be paid. Will the lender collect it monthly with your mortgage, or will you pay the city directly in installments? Either way works, but you should know which one it is, and what your real monthly total will be.
Third, budget the monthly amount from day one. For a London home with an assessed value around $350,000, that is roughly $500 a month in 2026. It is not a small number, and it sits next to your mortgage payment every single month, so it belongs in your budget before you fall in love with a house, not after.
The bottom line
Property tax in London is simple once you see the pieces. MPAC sets a value for your home, and that value is still frozen at January 1, 2016. The city sets a rate every year, about 1.73% in 2026. Multiply the two, and you have your yearly bill. Because the value is old and today's prices are much higher, the bill is usually lower than new buyers expect when they do the math on the purchase price. Check the real numbers for the home you want, know how the payments work, and put the monthly amount in your budget. That is how you avoid the surprise that catches so many first-time buyers.
This article is general information about property taxes in London, Ontario, not tax, legal, or financial advice. Rates change every year with the city budget, and every home has its own assessed value, so confirm the exact numbers for a specific home with your realtor, your lawyer, or the City of London before you make a decision.
If you are thinking about buying your first home in London, or you want to know what your monthly costs would really look like, Paola Cano, Real Estate Broker, and Jose Ramirez are happy to talk it through, with your numbers, before you commit to anything.
— Paola Cano & Jose Ramirez, Thrive Realty Group Inc., Brokerage, London, Ontario.
Sources: WOWA.ca, Ontario property tax rates (rates updated September 29, 2026); City of London 2026 budget; MPAC and the Province of Ontario on the January 1, 2016 valuation date.