Ontario municipalities revise schedules for property tax payments

REALpac survey reveals disproportionate tax rates

Tuesday, November 8, 2016

Canadian cities have extended the ongoing trend of decreasing commercial tax rates in an effort to promote business growth, according to a new report released by REALpac (Real Property Association of Canada).

Conducted by Altus Group, the REALpac Canadian Property Tax Rate Analysis is a Canada-wide survey of property tax rates of ten major urban centres. Vancouver, Toronto and Montreal continue to post the highest commercial-to-residential ratios of the cities analyzed. Vancouver is the only city to post a commercial-to-residential tax ratio in excess of 4:1, of the municipalities surveyed in 2016.

The 2016 survey reveals higher property tax rates for major cities in the Prairie Provinces, with the exception of Winnipeg, which saw commercial and residential rates decline due to the increased reassessment base. Rates have also come down in Vancouver, Toronto, Ottawa and Montreal. However, due to steadily rising assessment values in these cities, taxpayers may not see an improvement on their property tax bill.

“We continue to focus on the disproportionately high commercial tax rates in three major Canadian cities: Vancouver, Montreal and Toronto,” says REALpac’s CEO Michael Brooks. “High commercial property tax rates send business and economic development elsewhere, and work at cross purposes with infrastructure investments, particularly transit. Further efforts should be made in those cities to bring commercial property taxes down to more reasonable levels.”

For the fourth consecutive year, the highest estimated commercial taxes per $1,000 of
assessment are maintained by Montreal, Halifax and Ottawa. Although consistently at the top, all three cities experienced a decrease in commercial rates in 2016. Calgary saw the largest increase, with a portion of the business tax being consolidated into property taxes for non-residential properties. Despite the increase, Calgary’s commercial tax rate is still one of the lowest along with Vancouver and Saskatoon.

Edmonton, Saskatoon and Regina were the only other cities to see an increase in residential rates. Large tax bases and highly assessed property values allowed Toronto to decrease residential tax rates for the eighth consecutive year, while Vancouver saw a reduction for the thirteenth consecutive year.

The continued reduction of excessive property tax burdens on commercial and industrial properties will make cities more competitive, promote job growth and investment, result in increases to the property assessment base and subsequently generate more stable and sustainable revenue.

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