In the 2016 publication from the Ontario Ministry of Finance titled “Strengthening Ontario’s Property Tax and Assessment System” there was an inkling that some new tools could possibly become available to municipalities to allow them more flexibility with how they dealt with property taxes and their own constituents. Now as of January 2017 we have more details of what that might look like – and what the two biggest cities (Toronto and Ottawa) are proposing to do with it.
Toronto:
On March 23, 2017 the city held a meeting where they proposed various changes:
- The vacancy rebate program will be phased out. For the period Jan 1, 2017 to June 30, 2017 the program will continue at 100% of previous. From July 1, 2017 to December 31, 2017 the rebate will be cut in half. For 2018 the City proposes to cancel the program. This has been eliminated without consultation and can already be found in the budget moving forward.
- The City is recommending to cancel the vacant and excess land tax classes. They will be consulting with industry groups but the tax impact on the commercial and industrial classes could be significant since the tax rates mimicked the vacancy program – effectively reducing commercial rates (ignoring banding) by 30% and industrial rates by 35%.
- On the basis of the 2015 program data, the increase to revenue by eliminating vacancy rebates would be about $23,000,000, and the increase to revenue by eliminating the vacant tax rates would be approximately $24,000,000. That’s a total of $47 million in extra taxation on the commercial and industrial tax class
Ottawa:
- The City of Ottawa initially recommended elimination of the vacancy program within 2 years, but hasn’t yet proposed a timetable and is taking industry remarks.
- If the City were to eliminate the vacant or excess land rates, the impact would be a revenue increase of approximately $7 million dollars from just those properties – a 53% increase in tax!
Obviously this will impact different property owners in different ways – but it clearly will put a greater burden of taxation on commercial and industrial property owners. Make sure you’re aware of the changes that are coming through!
If you have any questions, please don’t hesitate to reach out at info(at)equitablevalue.com