Mayor Tory’s Proposal
On December 11, 2019, Toronto Mayor John Tory submitted a letter to the Executive Committee proposing an increase to the City Building Levy in order to raise the necessary funds for improving the existing transit system and building more affordable housing across the city. This proposed increase is an extension to the City Building Levy approved by City Council in 2017, which is a dedicated funding source from residential property taxes to be used for priority transit and housing capital projects. The levy approved in 2017 consisted of an annual increase to residential property tax of 0.5% between 2017 and 2021. The most recent proposal would increase property taxes 1% in 2020 and 2021 in addition to the existing 0.5% increment, and would continue at 1.5% annually from 2022 through 2025.
Toronto Has Room to Increase Homeowner Property Taxes – February 2019 CUR Property Tax Comparison Study
CUR’s earlier report concluded that Toronto has room to increase the average property tax rate by at least 20% on homes while still being in the middle range of the 29 GTHA municipalities. Looking at the average property tax levied on the average owner-occupied home (including condominiums) in Toronto compared to the other municipalities in the GTHA in 2016:
- The average property taxes in dollar terms in Toronto were some 10 percent less than those paid by the median-ranked municipality in the GTHA;
- The average effective property tax rate (taxes as a percent of market value) was 22 percent below the median for the 29 municipalities in the GTHA; and
- Toronto’s average property tax burden (taxes as percent of household income) was 21 percent below the median burden for the GTHA municipalities.
Mayor Tory’s Proposal Would Still Leave Toronto Property Taxes Amongst the Lowest in the GTHA
Forecasting the proposed increases to the City Building Levy until the proposed end year of 2025, the increase in property taxes in Toronto would bring the city closer to the mid-range of municipalities within the GTHA, as was recommended in our February report.