It looks like the City of Toronto’s property taxes are set to increase over the next few years. Depending on who I ask, people are either indifferent, happy, or furious.
Mayor John Tory campaigned on not increasing property taxes more than the rate of inflation, and with the recent announcement, it looks like an additional 8% will be added to your property tax bill by 2025. I’m willing to overlook Tory breaking his promise because he’s a politician, and by the time you’re my age, you understand that politicians talk a lot and make a lot of promises. I’m not taking it personally, it’s just politics.
I do somewhat have a tough time accepting higher property taxes in Toronto though. I understand that relatively, homeowners in Toronto pay less on average than other surrounding municipalities, but just hear me out.
The average property tax bill in Toronto in 2018 was $3,906, which is about $867 lower than the average bill in the GTA, Hamilton, and Ottawa. The only municipality paying lower property taxes is Milton. So, it seems like there’s room for Toronto to bump up property taxes, right? Not so fast.
I have two points I want to make; Toronto homebuyers pay a municipal land transfer tax that no other municipality has, and as the urban/financial centre of Ontario, the city’s population multiplies during working hours.
Let’s look at the land transfer tax first. As you probably know, everyone pays the provincial LTT when they by a home. This money is supposed to go towards infrastructure updates and growth to support the increasing population. Toronto is the only one with a municipal LTT. So what does this look like? If you bought a $600,000 home in Oakville, you’d pay $8,475 in LTT. If you bought a $600,000 home in Toronto, you’d pay both the provincial and municipal LTT for a total of $16,950.
This is a significant factor affecting the cost of buying a home in Toronto. I understand the need for a municipal LTT though because we have things like streetcars and subways. Other municipalities in the GTA don’t have this type of infrastructure, at least not on the same scale as Toronto.
A stronger argument for lower property taxes is that many of the people living in areas surrounding Toronto commute into the city every day during the week for work, and sometimes for fun on the weekends.
I feel like the people paying slightly higher property taxes outside of Toronto are putting some serious strain on our transit system and roads. Should Toronto homeowners have to pay more because of this?
I was in favour of tolling highways leading into Toronto’s downtown core, and it doesn’t look like that’s happening. If tolling were implemented, I bet we wouldn’t be seeing this property tax hike.
So, am I surprised Toronto’s property taxes are on the rise? Not at all. Can homeowners in the city afford it? I believe so. Is it entirely fair? I’m not so sure.