City of Toronto tax policies enhance Toronto’s business climate and help the most vulnerable in 2010|
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On Friday, March 26, Budget Committee will consider the 2010 municipal tax rates and municipal tax ratios. Overall, Toronto properties will see a 1.8% tax increase – an amount in line with the inflation rate as well as being among the lowest in the GTA. On average, due to Toronto City Council's progressive tax policies for city businesses, small businesses will see taxes reduced by 3% and apartment building owners (multi-residential) will see reductions of 1.8%.
A 2.9% single family residential tax rate increase means an additional $67.69 on the average property assessed at $407,374 in 2010. At the same time, industrial properties will see a 1.7% increase and large commercial properties' taxes will rise by 2.1%.
In total, 2010 property taxes will raise an additional $63.04 million ($44.22 million from residential, and $18.82 million from non-residential).
Continue to Enhance Toronto’s Business Climate
Council adopted a tax policy called ‘Enhancing Toronto’s Business Climate’ starting in 2006, to reduce the municipal tax ratios for the non-residential tax classes to 2.5-times the residential tax rate by 2020 (a 15-year plan). For small businesses in the non-residential tax class, the policy provided a reduction to 2.5-times the residential tax rate by 2015 (a 10-year plan).
In 2009, partly due to the impacts of reassessment, Council voted to speed up reductions in non-residential and tax rates so they are in place three years sooner. City staff have recommended this initiative be continued for 2010.
Council’s action on enhancing Toronto’s business climate will result in:
a. a 2.9% tax levy increase on the residential class;
b. enhanced assistance to small businesses (a 3.0% tax decrease) which will further improve their competitiveness;
c. lower impacts to larger businesses and industries by partially offsetting the CVA-related tax increase that would otherwise occur; and,
d. providing tax reductions for apartment buildings (a 1.8% tax decrease).
Since 2006, when the business tax relief policy was first implemented, the cumulative impact of business property tax relief is $257 million.
Current Value Assessment (CVA)
Municipal Property Assessment Corporation (MPAC) conducts property reassessments on a four-year cycle with Current Value Assessment (CVA) increases being phased-in between the four-year periods.
Increases arising from the 2009 reassessment are being phased-in at increments of one-quarter of the total increase, spread over the 2009 to 2012 taxation years. Any CVA decreases are not subject to phase-in and will be applied immediately.
This year, 58% of Toronto’s 651,000 residential properties will see immediate CVA-related tax decreases of 1.8% or $51 on average. The average for those facing phased-in CVA-related increases is 1.8% or $71.
Reassessment is revenue-neutral to the City. Legislation requires municipalities to reduce their tax rates in proportion to the increase in total assessed value arising from reassessment.
The 2010 phased-in CVA for the residential property class has appreciated on average by 5.2% as compared to the 2009 phased-in CVA. The average assessed value for all residential property types for 2010 taxation is $407,374, as compared to $387,217 for 2009 taxation purposes.
For the tax years 2009 through to 2012 inclusive, properties have been reassessed to reflect a January 1, 2008 valuation date. The next assessment update will take place for taxation years 2013-2016, with the valuation basis being January 1, 2012.
City of Toronto continues to help the city’s most vulnerable
The City provides both a Tax Increase Cancellation Program and a Tax Increase Deferral Program for low-income seniors and low-income persons with a disability that meet certain eligibility criteria. Under the Tax Increase Cancellation Program, eligible homeowners can have their tax increases - whether CVA or budgetary-related - cancelled. Under the Tax Increase Deferral program, eligible homeowners can have their tax increases - whether CVA or budgetary related - deferred without interest, and only repayable once the homeowner sells the property.
The City most recently enhanced its tax relief program for low income seniors and low income persons with a disability in 2009. At that time, City Council increased the household income criteria for the cancellation program from $26,000 to $36,000 and the CVA threshold for property value from $454,000 to $525,000 (automatically increases to $575,000 for 2011 and 2012). It is estimated that over 19,000 households are eligible for the cancellation program.
City Council also increased the household income criteria for the deferral program from $40,000 to $50,000 for 2009 and beyond. The age criteria for the deferral program is still 50 years of age or older, and there is no CVA property-value threshold for the deferral program. Approximately 82,000 households are estimated to be eligible for the deferral program.
The City also provides a Water Rebate Program on Utility Bills for low-income seniors and low-income persons with a disability who are eligible for either of the tax relief programs, where eligible homeowners are entitled to approximately 30% rebate on their Utility Bill water charges. Consumption thresholds have also been increased for 2010 to 400 cubic metres. This means that homeowners with a metered account can be eligible, if they consume less than this amount.
Toronto is Canada's largest city and sixth largest government, and home to a diverse population of about 2.6 million people. It is the economic engine of Canada and one of the greenest and most creative cities in North America. Toronto has won numerous awards for quality, innovation and efficiency in delivering public services. Toronto's government is dedicated to prosperity, opportunity and liveability for all its residents. For information about non-emergency City services and programs, Toronto residents, businesses and visitors can dial 311, 24 hours a day, 7 days a week.
More information: http://www.toronto.ca/budget2010/index.htm
Cindy Bromley, Communications Manager, Finance & Administration, firstname.lastname@example.org, 416-392-4993