Ouch. Some Toronto residents could be on the hook for an extra $104 in property tax this year.
Toronto’s city councillors approved a 2.55% residential property tax hike on Thursday as part of the 2019 budget. The hike actually works out to 3.58% when things like the city building fund, which is used to support projects like transit and housing, are factored in.
When applied to a $665,605 home, that hike results in a $104 increase for 2019, for a total property tax bill of $3,020, city staff said.
That’s a conservative scenario, though, considering the average price for a detached home in the City of Toronto costs $1,294,936, according to resale market figures reported by the Toronto Real Estate Board this month.
Last year, Toronto households paid, on average, $3,906 in property taxes, according to a 2018 Municipal Study done by BMA Consulting Inc.
But that’s still relatively low, according to a recent report from Ryerson University, which says that Toronto actually pays some of the lowest property taxes in the Greater Toronto Area and surrounding municipalities.
“Across the Greater Toronto and Hamilton Area, more than 20 municipalities “recorded higher average property taxes than Toronto,” wrote the report's author, Frank Clayton, a senior research fellow at Ryerson University's Centre for Urban Research and Land Development.
Mayor John Tory proposed the property tax hike, which council approved by a 21-4 vote.
“This budget moves our city forward in a balanced, responsible way,” Tory told reporters before the meeting.
But Tory’s opponents say that his operating budget is incomplete, with about $79 million still unaccounted for. There’s the $45 million that the city requested from the federal government — funds which were supposed to help with housing of refugees in Toronto, but which the city has not yet received from Ottawa. And, as Toronto Star reports, there’s another “$34 million in unspecified cuts.”
The hike is meant to keep the property tax rate in line with inflation. During his municipal election campaign last fall, Tory promised to keep the tax rate either at or below the rate of inflation. The country’s Consumer Price Index, which is used as a measure of the change in inflation, rose 1.4% year-over-year in January, down from a 2% increase in December 2018, according to Statistics Canada.
Property tax is a costly reality of home ownership. It’s typically calculated by the local government based on the value of a person’s property. The tax you pay will be a percentage of your home’s value. That percentage will vary, however, depending on where you live.
If you’re in Ontario, how much you pay will be determined, in part, by something called MPAC — a not-for-profit organization that the province works with to assess property values in Ontario.
Once every four years, MPAC provides the government with an assessment update. (The next one is scheduled for 2020). If the value of your property changes over time, it’s possible that your property tax will increase as well — though it’s not necessarily guaranteed.
Tory’s $13.5-billion operating budget includes some other increases as well. Water is going up by 3%, garbage fees are increasing by 2.2% and the TTC received approval for a fare increase of 10 cents.
“This budget ensures we continue to deliver City services efficiently, and keeps property tax increases at the rate of inflation,” budget chief Gary Crawford said.