Owning Toronto Real Estate keeps getting more expensive! The City of Toronto has proposed a 10.5% tax increase, which amounts to approximately $300 per year for the average household. In addition, if the federal government isn’t able to provide financial relief, that number could reach 16.5%.
City officials report that the money is needed to battle a hefty budget shortfall. Olivia Chow calls it “the first step in the process of getting our city back on track.” The rate of increase isn’t settled just yet, it will be finalized by mid-February.
How Will City Services Be Affected?
Toronto services have been in a state of decline for some time according to Chow. This will range from increasing services on the TTC to better park maintenance to better clean up in the streets. Funds from the proposed property tax increase will also be used to cure the 1.8 billion dollar budget deficit.
Have Torontonians Been Paying Artificially Low Property Taxes?
A report shows that Toronto property taxes have not maintained the same pace as neighbouring communicates in the GTA. The report notes from 2013 to 2021, Toronto property taxes increased by 1.15% lower than the average of Hamilton, Burlington, Mississauga, Brampton and Markham.
The report proposes the city raise property taxes to similar levels of neighbouring communities. This would call for a one-time increase of 10-12% above the inflation rate, resulting in a potential 13-16% total hike (depending on inflation).
This adjustment could create additional revenue ranging from $490 to $580 million. If necessary, the increase could be phased in over 2-3 years to put some financial relief on the residents with lower incomes.
What is the Reaction From Council So Far?
Some councillors are expressing early opposition to the budget. The full report will reviewed in the coming weeks and a decision will be made. Opposition to the proposed budget is not only based on the property tax increase. For example, there are concerns about budget cuts to snow plowing raised by suburban councillors.
What’s Next?
There is still much room for debate regarding this tax hike. A series of meetings will take place and the final vote will take place on February 14th.
Will the Proposed Increase Come Down?
There is a chance. Chow is pushing people to give her feedback on her budget. Politics will come into play here as well. She is still in the honeymoon phase with Torontonians and taking the hit not vs in two years when we are closer to the next election might be the smart thing to do.
Will Property Taxes Continue to Increase?
According to the city, this tax increase will help close the budget gap; however, they don’t expect property taxes to increase as significantly in the future. Nevertheless, don’t expect a freeze on property taxes on Toronto real estate in the future.
If you or are planning on making a move and would like expert advice from a Toronto Real Estate Agent, please feel free to reach out. Whether you are looking to buy, sell, or invest, our team is composed of several agents who are ready to assist.
