Reverse Mortgage and Property Taxes in Ontario
A reverse mortgage does not pay your Ontario property taxes automatically — you remain responsible. Learn how tax deferral programs compare and what lenders require.
Scott Dillingham•May 24, 2026A reverse mortgage in Ontario does not automatically cover property taxes — you remain responsible for paying municipal taxes and keeping insurance current. Falling behind on property taxes is a default trigger under every Canadian reverse mortgage contract. Many Ontario seniors use reverse mortgage proceeds to fund tax payments, or compare the property tax deferral program as an alternative.
Your ongoing obligations with a reverse mortgage
Every Canadian reverse mortgage requires you to:
- Pay property taxes on time
- Maintain home insurance
- Keep the home in reasonable repair
- Use it as your primary residence
Failure on any of these can trigger repayment. This is separate from the no-monthly-payment feature — taxes are still your bill.
Using reverse mortgage proceeds for taxes
Many Ontario borrowers take a lump sum or scheduled advance specifically to create a tax reserve. Because reverse mortgage proceeds are a loan advance, not income, they do not affect OAS or GIS the way RRIF withdrawals might.
Model your cash flow with the benefits impact calculator if you are weighing reverse mortgage proceeds against registered withdrawals.
Ontario property tax deferral vs reverse mortgage
Ontario municipalities offer a low-interest property tax deferral for seniors 65+ in many communities. Key differences:
| Factor | Tax deferral | Reverse mortgage |
|---|---|---|
| Purpose | Property taxes only | Any use — debt, renovations, income |
| Amount | Taxes owed | Up to 55% of home equity |
| Interest | Low municipal rate | Higher lender rate |
| Eligibility | Age 65+ (varies by municipality) | Age 55+ |
Read our full guide on property tax deferral alternatives.
Ontario-specific planning notes
Ontario has all five lenders competing — see city guides for Toronto, Ottawa, Hamilton, London, Mississauga, and Windsor. Compare rates and closing costs before deciding.
Bottom line
Property taxes do not disappear with a reverse mortgage. Plan for them explicitly — either from proceeds, deferral, or other income — and confirm your municipality’s deferral rules before you apply.