A tax penalty is an additional charge applied when property taxes are not paid by the due date, distinct from ongoing interest charges. Penalties are typically calculated as a percentage of unpaid taxes (often 5-15%) and applied immediately upon missing the deadline. The penalty serves as both punishment for late payment and incentive for timely payment. Provincial legislation may set maximum penalty rates municipalities can charge. Some municipalities apply penalties at multiple points—an initial penalty for missing the deadline plus additional penalties if taxes remain unpaid at later milestones. Penalty revenue partially compensates municipalities for collection costs and cash flow impacts of late payments. Property owners facing hardship should contact municipalities about payment arrangements to avoid penalties.