Market Insight for February 16

So it’s official! City Council voted in favour of the 9.5% increase to the residential property tax rate when they met on Wednesday to finalize the 2024 budget.

The tax hike, bigger than any since the city’s amalgamation in 1998, was opposed by some councillors, who argued that residents were already struggling with inflation and high mortgage payments, and called on the city to reduce its costs instead. But in the end the increase passed by a vote of 18-8.

The 9.5 percent hike means that the average Toronto household will pay just under a dollar more a day, or an average of $338 for the year as the municipal government digs itself out of a financial hole and their $1.8-billion shortfall for this year. By law, the city cannot run a deficit.

In addition, the budget includes base property tax increases of 2.95% for multi-residential properties, 4% for commercial properties and 8% for industrial properties With this new record high property tax increase this week, statistics show a growing number of seniors are asking for exemptions from bigger tax bills.

Almost 8,300 homeowners successfully applied for Toronto’s property tax increase cancellation program in 2023, according to figures provided by the city. That was an almost 44 per cent increase from 2018, when about 5,800 applications were approved.

The program scraps tax increases for eligible applicants and was designed to provide financial relief for seniors and people with disabilities on fixed incomes. A related program allows homeowners to defer payment of property tax hikes. The number of approvals under that program is smaller, at fewer than 400 last year, but is also growing. The city estimated in 2022 that these tax relief programs cost the city about $3.8 million a year.

Mayor Chow said the city had kept tax increases low in past years by draining its reserve funds, skimping on services and deferring repairs and maintenance. She said Torontonians will see an immediate difference in exchange for the tax increase, including a $50-million fund aimed at fixing visible signs of the city’s decay such as shuttered public washrooms, broken water fountains and dirty sidewalks.

This is Ms. Chow’s first budget since winning the election last year. She would not speculate on next year’s property-tax hike, saying it depends on whether senior levels of government support cities and how coming contract talks with the city’s unions go.

Other highlights from the 2024 budget include investments of $126M into affordable housing and shelters, $30M into transit services and environmental sustainability, $44M into community services and supports, as well as a $50M ‘back on track fund,’ that will be used to support urgent state-of-good-repair work, address infrastructure deficiencies, and make certain public space enhancements.