ATTENTION PROPERTY OWNERS – 2023 Municipal Budget calls for Property Tax Increase of 5.5%

By Ridhima Pathak

It is of no surprise that the cost of living has been on the rise. The highlight this week has been the release of the 2023 Municipal Budget. Property owners in Toronto are now facing a 5.5% increase in residential property taxes, which is by far the highest hike to date. This increase will be invested into housing including homelessness, social services such as child care, employment services, and youth development, as well as health services. The City has emphasized that the increase remains below the 6.6% inflation rate.

What property owners want to know is how this affects their finances personally. If you are purchasing a home that is assessed at the value of $695,268. The property tax on the home would be $3,569. The average household is impacted by $183 towards city operations, and $50 for the City Building Fund i.e. transit and housing capital projects. More information can be found here - https://www.toronto.ca/city-government/budget-finances/city-budget/.

Post Covid-19, the City has been under great financial pressure. In particular, Toronto relies on the municipal land transfer tax to fund this budget. Municipal land transfer tax is payable when an individual purchases a home. With the real estate marking slowing down, the number of transactions has decreased significantly. As such, City is experiencing difficulty in covering these proposed expenses and must seek alternative means for municipal funding. In this case, they are looking towards the increase of property taxes.

Contact Ridhima Pathak at ridhima@sorbaralaw.com for any questions or updates on the real estate market.