It's a common perception for homeowners that finishing their basements will substantially increase their property taxes.
This may be true in some cases, but in most cases it is not.
Your property taxes are laterally connected to your house value, and there is a fixed percentage that is set frequently by your municipality to determine the amount you pay against your property tax. This constant or percentage is usually published on your Municipality’s website.
However, the entity that evaluates property values known as MPAC (Municipal Property Assessment Corporation) usually uses a blanket formula for all similar buildings in a neighborhood. So, for example, all single family detached dwelling in a subdivision that are between 2,000 and 2,500 sqft in gross floor area would be assigned the same value, and it is not common for your Building Department to share information about your building permit with the assessment corporation. Therefore, in most cases, your assessed house value will remain the same after you finish your basement unless a special assessment takes place for your property.
There is however, the case of converting your basement into a basement apartment, also known as a secondary suite.When converting your basement to a secondary suite, you are technically creating a new unit for which a separate invoice for property tax is generated.
The main dwelling property tax should be reduced, but the combined sum of property taxes for the main and the secondary suite is typically higher than what you would be paying for your house without the secondary suite.
Some Municipalities have online property tax calculators that would help you determine what the assessment value of your house is, or what your property tax would be based on your assessed house value.
City of Toronto – Property Tax Calculator: https://wx.toronto.ca/inter/fin/tax.nsf/tax?openform
City of Mississauga – How your property tax is calculated: