If you own a home, rental property, or commercial building in London, Ontario, property tax is one of the largest ongoing costs you’ll face — and one of the most misunderstood. It funds everything from snow removal and police services to schools and parks, and it’s calculated using a system that catches many homeowners off guard, especially the fact that your assessed value is still based on 2016 market conditions.
This guide breaks down how London property taxes work in 2026, what’s changed, how to read your bill, when to appeal, and the related taxes — like CRA’s rental income rules, Land Transfer Tax, and the Underused Housing Tax — that often get confused with property tax itself.
How Property Taxes Are Calculated in London?
Your property tax bill is calculated using a simple formula:
Assessed Value × Total Tax Rate = Property Taxes Owed
Two parties are involved: the Municipal Property Assessment Corporation (MPAC) determines the assessed value, and the City of London sets the tax rate annually based on its budget. The total tax rate includes a municipal portion (set by City Council) and an education portion (set by the Province of Ontario).
The MPAC Assessment — and Why It’s Still Based on 2016
Here’s something critical that most older guides get wrong: MPAC assessments are not updated every year. Ontario operates on a four-year reassessment cycle, but the most recent province-wide reassessment was based on a January 1, 2016 valuation date — and the province has repeatedly postponed the next update.
Property assessments for the 2026 property tax year continue to be based on fully phased-in January 1, 2016, current values. In practical terms, your 2026 assessment reflects what your property would have sold for nearly a decade ago, not today’s market value. With London home prices having risen significantly since 2016, most homeowners’ MPAC assessments are well below current market value — which is fine, because the system is revenue-neutral: it’s the tax rate that ultimately determines how much the city collects.
You’ll only receive a new Property Assessment Notice if something has changed — new construction, an addition, a renovation, a severance, or a classification change.
The Tax Rate
London’s combined property tax rate (municipal + education + transit/library/police levies) for residential properties sits at roughly 1.38% in 2026, depending on the property class. For a home with an MPAC assessed value of $300,000, that translates to about $4,140 in annual property tax. Note: this is based on the assessed value, not the current market price, which is why a London home selling today for $600,000 may still have an assessment in the $300,000–$400,000 range.
Property types are taxed at different rates. The main classes are:
- Residential
- Multi-residential (apartment buildings)
- Commercial
- Industrial
- Farmland and managed forest (taxed at reduced rates)
Commercial and industrial rates are typically two to three times higher than residential rates.
London’s 2026 Property Tax Increase
After two consecutive years of significant tax pressures, the Council approved a more moderate increase for 2026. London has achieved a 2026 property tax increase of 3.6%, with forecasted 2027 increases reduced to 4.7%. For the average London household, the 2026 increase translates to about $160 more per year, including water and wastewater charges.
This is meaningfully lower than earlier projections, which had suggested rates closer to 6%. The reduction was achieved through internal savings, debt avoidance, and operating surpluses applied against the budget — not through service cuts.
2026 Payment Schedule
London property taxes are billed twice a year, with each bill split into installments:
Interim Tax Bills (covers first half of 2026):
- Mailed: January 31, 2026
- Due: February 27, 2026, and March 31, 2026
Final Tax Bills (covers balance of 2026):
- Due: June 30, 2026, August 31, 2026, and October 30, 2026
If you’d rather not track five different due dates, the City offers a Pre-Authorized Payment Plan that spreads payments over 10 months (January to October), with no payments in November or December.
You can also pay through your bank, by mail, online, or in person at City Hall (300 Dufferin Avenue).
What Affects Your Assessed Value?
Even though the province-wide assessment is frozen at 2016 values, your assessment can still change if your property changes. MPAC will reassess and issue a Property Assessment Change Notice when:
- You build a new home or addition
- You complete major renovations
- A structure is demolished
- Your property is severed
- The classification changes (e.g., farmland to residential)
Importantly, routine maintenance — painting, replacing a roof, fixing a deck — does not trigger a reassessment. Only structural changes or additions that affect what the property would have been worth on January 1, 2016, are captured.
How to Appeal Your MPAC Assessment?
If you believe your assessment is too high, you have two avenues:
1. Request for Reconsideration (RfR) — Free, filed directly with MPAC. This is the mandatory first step for residential, farm, and managed forest properties. The deadline to file a Request for Reconsideration for the 2026 property tax year is March 31, 2026.
2. Appeal to the Assessment Review Board (ARB) — An independent provincial tribunal. For residential properties, you must complete the RfR process first before appealing to the ARB.
Before filing, log in to MPAC AboutMyProperty™ to compare your assessment with similar properties in your neighborhood. If you find your home is assessed significantly higher than comparable nearby properties (adjusted for size, age, and condition), you may have grounds for an appeal.
Property-Related Taxes That Aren’t Property Tax
This is where many London homeowners and investors get confused. Several other taxes touch real estate in Ontario, and they’re often lumped together in conversation as “property taxes” — but they’re distinct.
Land Transfer Tax (LTT)
Paid once, when you purchase a property. Ontario’s Land Transfer Tax is calculated on a sliding scale based on the purchase price (not the assessed value). Unlike Toronto, London does not have a municipal LTT — buyers here pay only the provincial portion. First-time buyers may qualify for a rebate of up to $4,000.
Capital Gains on Sale
If the property is your principal residence, the sale is generally tax-free under the Principal Residence Exemption. If it’s a rental or investment property, 50% of the capital gain is included in your income and taxed at your marginal rate. The proposed increase to a two-thirds inclusion rate above $250,000 announced in 2024 was ultimately not enacted, so the 50% inclusion rate remains in effect for 2026.
Rental Income (CRA)
Property tax paid on a rental property is a deductible expense against rental income on your T1 (Form T776 — Statement of Real Estate Rentals). The same applies to mortgage interest, insurance, repairs, utilities (if paid by the landlord), and property management fees. Keeping clean records year-round is the difference between a smooth tax season and a CRA audit headache — which is where a local bookkeeping service becomes valuable.
Underused Housing Tax (UHT)
A federal 1% tax on vacant or underused residential properties owned by non-resident, non-Canadian owners. Most Canadian individuals are now exempt from filing as of the 2023 amendments, but certain Canadian corporations, partnerships, and trustees still need to file an annual UHT return — even if no tax is owed. Penalties for non-filing start at $1,000.
HST on New Construction
If you buy a newly built home, 13% HST applies (with potential rebates). HST does not apply to the resale of residential homes.
Tips for London Property Owners in 2026
- Set up Pre-Authorized Payment if you don’t already — it eliminates late-payment penalties.
- Review your MPAC Notice carefully if you receive one, especially after renovations. The March 31, 2026, RfR deadline is firm.
- Track all property-related expenses if you have a rental property — they’re deductible.
- Don’t confuse market value with assessed value. A higher market value doesn’t automatically mean a higher property tax.
Talk to an accountant before major moves — adding a basement apartment, selling a property held in a corporation, or converting your principal residence to a rental all have tax consequences that go beyond property tax.
Frequently Asked Questions
How often does MPAC reassess my property?
The legislated cycle is four years, but Ontario has postponed the next reassessment several times. Currently, all 2026 assessments are still based on January 1, 2016 valuations. You may receive an updated assessment outside this cycle if your property changes.
Can I appeal my property tax assessment?
Yes — file a Request for Reconsideration with MPAC by March 31, 2026, for the 2026 tax year. If you disagree with the RfR outcome (for residential property), you can then appeal to the Assessment Review Board.
Are there rebates or exemptions for London property owners?
Yes. Charitable organizations, registered farms, conservation lands, and managed forests qualify for reduced rates or rebates. London also offers seniors’ tax deferral options in some cases. Check london.ca for current programs.
What happens if I don’t pay my property taxes on time?
The City charges a penalty and interest on overdue amounts at 1.25% per month. Continued non-payment can result in a lien against your property and, eventually, tax sale proceedings.
Can I prepay my property taxes?
Yes. The Pre-Authorized Payment Plan spreads payments across 10 months. You can also make lump-sum prepayments to your tax account at any time.
Is property tax deductible on my income tax return?
Only if the property generates income. Property tax on your principal residence is not deductible. Property tax on a rental property is fully deductible against rental income. Property tax on a home office can be partially deductible if you meet CRA’s home-office criteria.
Need Help Navigating Property-Related Taxes?
Property tax itself is paid to the City of London — but the bigger picture (rental income, capital gains, UHT, principal residence designation, corporate ownership of real estate) is filed with the CRA, and that’s where mistakes get expensive. If you own residential or commercial property in London or anywhere in southwestern Ontario, MultiTax Services can help you structure ownership, claim every deduction you’re entitled to, and stay compliant year over year. Book a free consultation.
