If you’re a homeowner you’re probably familiar with property tax. But even though you may pay property tax, you may wonder how your property taxes are set, and what the money is used for.

Let's break down How Your Property Tax is Set and Spent.

To figure out how much property tax you should be paying, the provincial government and a group called MPAC both play an important role.

The Provincial Government puts laws and policies in place which municipalities enforce to regulate property taxes.

The Municipality sets a budget for the following year by determining how much money is needed to run all the major services, such as police, fire, snow removal, upkeep of roads & sidewalks, public transportation, waste management, and parks and recreational facilities.

MPAC stands for the Municipal Property Assessment Corporation, and they set the value of your home and designate your property.

To calculate your property tax, MPAC uses the Current Value Assessment (CVA) of your property. In Ontario, property assessments are updated on a four-year assessment cycle.

To establish your home’s value they factor in the property’s location, square footage, lot size, renovations, additions, build quality and more.

Once value has been determined as well as the designation of the property, they multiply your CVA number by the municipal tax rates and educational tax rates that the provincial government has established. And that's how your property taxes are set and spent!