Author: Financial Awakening Blog
If you still haven’t read Step 1 – Plan ahead. Imagine where you are when you retire, I highly recommend you to read it first.
I was away for a week and see a lot in Denmark and Sweden. There is one thing that keep wandering in my mind and cannot go away.
The property tax in Sweden has a cap
In our country, there is no such thing as property tax cap. As long as MPAC gives you a 10% to 15% bonus on your assessment and our government needs to squeeze more money out of us, we pay. No question. The main reason why Sweden gives a cap on the property tax is because the property value is going up the ceiling. And if there is no cap on the property tax, the elderly will not have enough money to pay for the tax and hence they will no longer be able to live in their homes.
When you think about it, isn’t the same situation happening all over Canada? For example, a single family home goes from 360k a few years back to current price of 560k in Toronto. I cannot imagine how a retired person can pay for the property tax without renting out part of their home. In 2012, MPAC will jack up the property value and the property tax will increase in 4 installments.
The property tax in Sweden is 6000 SEK, which is equal to around $1000 CAD/USD. It would be our dreams to have a property tax ceiling like that. A single family home of value $560k will have property tax around $5600 in 2016. This is such a big contrast!
It is sad that paying off the mortgage is not the end of the story. There are still more fee you cannot control. Property tax, insurance, hydro, gas, water.
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