TORONTO – NEWS – Mayor John Tory and the Executive Committee approved a report that recommends providing a 15 per cent property tax reduction to small business through the creation of a small business property tax subclass. Council will now consider the report at its November 9 and 10 meeting.
“We are sending a message loud and clear that small businesses in Toronto will be supported. We know the last year and half have been extraordinarily tough for all businesses, but particularly for the shops that line Toronto’s streets. We are here to reassure businesses that have been asking for help that we have their back – and we’ll use smart tax policies like this one to ensure they grow and prosper and continue to serve the residents of Toronto. This 15 per cent tax reduction for small businesses is one more way we are working to ensure that our city comes back stronger than ever,” says Mayor John Tory.
If approved by Council, eligible small businesses within the commercial tax class will receive the 15 per cent tax reduction in their property taxes starting in 2022. It’s estimated that property tax reductions will apply to approximately 25,000 small businesses across Toronto, or 60 per cent of all commercial properties.
Businesses who qualify will be separated into two categories:
Businesses located downtown, on the central waterfront, in designated growth centres or avenues in the City of Toronto’s Official Plan
• properties must be classified within the commercial or new commercial tax class (with certain property types excluded)
• properties must have a Current Value Assessment (CVA) less than or equal to $7 million
• lot size must be 7,500 square feet or less, or for commercial condos a gross floor area of 2,500 square feet or less
Businesses located anywhere else in the city
• properties must be classified within the commercial or new commercial tax class (with certain property types excluded)
• properties must have a CVA less than or equal to $1 million
For example, a mom and pop shop downtown or on an avenue in Etobicoke with property assessed at $3 million and meeting the lot size limit would see a more than $8,500 reduction while a mom and pop shop in Scarborough off of an avenue with a property value of $1 million would see a more than $1,800 reduction in its property taxes.
No application will be required, as all commercial properties will be assessed for their eligibility. There will also be a request for reconsideration or appeal process for properties owners who feel their property should be included in the new tax subclass.
The provincial government is expected to match the municipal tax rate reduction with a corresponding reduction in the business education tax for all eligible small business property owners.
In the 2020 provincial budget, municipalities were given the ability to create a small business tax subclass to provide a lower property tax rate for small businesses within the commercial tax class. Council requested that City staff define and develop a small business tax subclass to address the preservation and rebuilding of Toronto’s main streets and to offer tax reductions for a broad range of small businesses across Toronto.
