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Top tax-friendly towns: Gravenhurst

by CRE on 16 Jun 2015
The majority of the communities in Northern Ontario’s Muskoka Region are revered as recreational hotspots, but more investors are realizing that there is more to towns like Gravenhurst than just cottages and a leisurely lifestyle.

Gravenhurst is a smaller market, but its real estate market has many big things going for it. The property inventory is both varied and affordable, and the low property taxes make the area more appealing to investors. The local tax rate is 0.00212 per cent per $1,000 of the assessed value.

Tax factors

Gravenhurst’s property tax rate has fluctuated greatly over the years, but has generally remained below 0.0025. In 2011, the rate was 0.00231 per cent, and this value decreased to 0.00221 percent the following year. In 2013, the rate dropped again to the value of 0.00212 per cent.

Taxes paid in Gravenhurst also feature a number of other elements. These elements include waste management, the sewer and water systems, financing for the local hospital, and lighting. There are also general taxes for the upper and lower tiers.

Market performance

Regardless of whether the buyer is after a new home, cottage or investment property, the average price point in Gravenhurst is relatively affordable. According to market data from Trovit.ca, the average price is $286,905 [in June 2014].

“Multi-residential properties have been selling quite well because they have been seeing good cap rates and return on investment,” says David Reid, a sales representative and co-owner of Enjoy Muskoka Realty.

“New builds are quite costly and a multi-residential property in good shape is selling quite quickly in our marketplace,” he continues.

“Investors looking for quicker returns like these kinds of properties. However, there are still investors that look to buy older waterfront properties suitable for re-development.”

Average rents in Gravenhurst tend to vary depending on the property purchased. According to Reid, two-bedroom apartments max out at $900 per month, while three-bedroom bungalows can bring in $1,400 per month.

Looking ahead

The combination of affordable prices and a lower property tax in Gravenhurst are a perfect marriage for investors, especially those who have lower operating budgets. Although the market is not very large in size, the town’s appeal to vacationers makes this area appealing for the short-term rental market and those looking for long-term appreciation.

Population: 12,055 (2011)
Property tax rate: 0.00212
Average price: $282,905
Average rent: $1,400 (three-bedroom house)
Vacancy rate: 3.9%

To learn more about Canada's vacation and recreational property market, subscribe to CREW or pick up the annual 'Cash in Cottage Country' report, now on newsstands

This article was originally published in the June 2014 issue of Canadian Real Estate Wealth magazine



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