Toronto residents are bracing for a significant increase in their property taxes this year, as the city’s budget proposal includes a 7% hike for residential properties. The budget, which was released on Tuesday, also proposes a 1.5% increase to the city building levy, which is used to fund capital projects such as roads, bridges, and public transit.
Why is the property tax going up?
The city’s budget chief Shelley Carroll said that the property tax increase is necessary to help address the city’s structural deficit, which is projected to be $1.2 billion in 2023. The deficit is caused by several factors, such as:
- The impact of the COVID-19 pandemic on the city’s revenues and expenditures
- The rising costs of health care and social services
- The aging infrastructure and buildings that need repairs and upgrades
- The increasing demand for housing and affordable housing
- The need to invest in climate action and environmental sustainability
Carroll said that the city has tried to balance its budget by cutting costs, increasing efficiencies, and finding new sources of revenue. However, she said that these measures are not enough to meet the long-term needs of the city.
How much will it cost homeowners?
According to the budget summary, the average homeowner in Toronto will pay $1,400 more in property taxes this year, which amounts to a 7% increase from last year. This is below the rate of inflation (2.9%), but still higher than many other cities in Canada.
The budget also proposes a 15% property tax rate reduction for small businesses across Toronto, which will benefit more than 29,000 businesses with an average annual revenue of less than $1 million. This measure is intended to support recovery efforts and stimulate economic activity after the pandemic.
The budget also includes a planned 1.5% increase to the city building levy, which will raise an additional $50 million for capital projects. Some of these projects include:
- Building new schools and community centres
- Expanding public transit and bike lanes
- Improving roads and bridges
- Enhancing parks and green spaces
- Supporting affordable housing and homelessness prevention
How will homeowners react?
The proposed property tax hike has sparked mixed reactions from homeowners across Toronto. Some have expressed frustration and anger at having to pay more taxes while facing economic hardship due to the pandemic. Others have welcomed some of the initiatives in the budget that aim to improve their quality of life and well-being.
Some homeowners have also questioned why they have not received any notice or communication from their ward councillors or city staff about the proposed budget or its implications for them. They have also complained about the lack of transparency and accountability in how their taxes are spent.
The final version of the budget will be voted on by City Council on February 15. It will then be submitted to Queen’s Park for approval by March 31. If approved by both levels of government, it will take effect on April.
