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July 24, 1998
Council approves property tax rates, phase-ins and caps
  
Toronto City Council last night approved a property tax plan, including
phase-ins and caps, which makes the impacts of the provincial current value
assessment system manageable for most Toronto taxpayers.

Highlights of the plan include:

· Property tax increases and decreases for residential property owners will be
phased-in over five years. (A summary of phase-ins is provided on the second
page of this release.)
· Apartment buildings, commercial and industrial properties facing property tax
increases will have those increases capped at 2.5 per cent in each year from
1998 to 2000. Properties with tax decreases will have a portion of their
decreases withheld to pay for the caps.
· Low-income seniors and low-income disabled persons will be eligible to defer
assessment-related property tax increases until their homes sell. Seniors with
household incomes below $20,000 will benefit the most, while seniors with
household incomes up to $35,000 will receive less relief.

"I'm glad Councillors from every former city supported this compromise
solution," said Toronto Mayor Mel Lastman, speaking about the phase-ins
approved by Council. "The plan achieves a balance which provides more time to
taxpayers who have to pay more and it ensures that taxpayers entitled to a
decrease will get most of that decrease soon."

Current value assessment (CVA) is the new assessment system introduced this
year by the Ontario provincial government. It assigns each property an
assessment based on an estimated 1996 value. A tax rate is applied to a
property's assessment to determine its property taxes.

It has been a challenge for City Council to reach a consensus about how to
introduce CVA in a fair and equitable way because 54 per cent of Toronto
properties experience a tax decrease and 46 per cent of properties face a tax
increase under the new system.

The phase-in plan was considered the best solution possible. In addition, the
assistance to low-income seniors and disabled provides relief to those who need
it most.

The plan adopted by Council, including the caps, is part of an interim plan for
a three-year period from 1998 to 2000. More work has to be done before the
next scheduled reassessment in 2001 to review changes to the new system
regarding specific properties such as small or strip retail businesses and
providing more effective protection for charitable organizations.

Summary of Phase-ins for Residential Property Tax Decreases and Increases

Residential tax decreases and increases will be phased-in over five years.

Decreases
· Taxpayers with property tax decreases less than $200 will receive the full
decrease in 1998.
· Decreases greater than $200, but less than $1,000, will be phased-in over
five years at $200 per year until the decrease is received in full.
· Decreases greater than $1,000 will be phased-in over five years in equal
amounts each year.

Increases
· Taxpayers with property tax increases less than $300 will pay the full
increase in 1998.
· Increases greater than $300, but less than $1,500, will be phased-in over
five years at $300 each year until the full amount of the increase is paid.
· Increases greater than $1,500 will be phased-in over five years in equal
amounts each year.

About 80 per cent of all residential taxpayers will see their full change in
taxes within three years.

Council also set 1998 property tax rates for City and education purposes as
follows:

· Residential -- 1.25970 per cent
· Multi-Residential -- 4.64684 per cent
· Commercial -- 7.64275 per cent
· Industrial -- 10.6640 per cent


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City of Toronto
Public Information Centre
(416) 338-0338

 

 

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