Today, City Council voted to move forward with a 15 per cent property tax reduction to small businesses.
The new small business property tax subclass will come into effect for the 2022 tax year. It is estimated that property tax reductions will apply to approximately 25,000 small businesses across Toronto, or 60 per cent of all commercial properties.
Businesses will be eligible if they meet either of the following criteria:
For example, a small business located in the city’s downtown or on an avenue in Scarborough with property assessed at $3 million and meeting the lot size limit would see a tax reduction of more than $8,500, while a small neighbourhood restaurant business in North York in a non-retail location with a property value of $1 million would see a reduction of more than $1,800 in annual property taxes.
Small business property owners do not need to apply for this tax relief, as all commercial properties will be assessed for eligibility. A request for reconsideration or appeal process will be available for property owners who feel that 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’s decision today to implement the small business tax subclass will provide much needed support to preserve and rebuild Toronto’s main streets and will offer tax reductions for a broad range of small businesses across Toronto.
The report “Implementing a Small Business Property Tax Subclass”, which Council considered today, can be found here
“We must support small businesses – plain and simple. The pandemic hit small businesses particularly hard, and we have to create smart tax policies to show small business that we have their back. If small businesses don’t come back strong, our city doesn’t come back strong. We want Toronto to be a city that fosters growth, innovation and economic success – and that starts with the small businesses that line our main streets. A 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.”
– Mayor John Tory
“Tax policies like this one are just one way we will continue to support small businesses in the city. Attracting and supporting small business on our main streets is key to Toronto’s long-term prosperity. The success of the neighbourhood food store, barber shop or boutique are important to their community and contribute to the overall success and fabric of our city. The City recognizes that it has been a difficult year and a half for many businesses and is committed to supporting a strong and successful post-pandemic Toronto.”
– Councillor Gary Crawford (Scarborough Southwest), Chair of the Budget Committee
“A thriving small business sector equals a thriving Toronto – and supporting these businesses is key to Toronto’s economic recovery. We want small business owners to know we support them and we are committed to their prosperity. Policies like this create fairness in our property tax system and ensure that small businesses can not only stay in our communities, but succeed in our communities.”
– Deputy Mayor Michael Thompson (Scarborough Centre), Chair of the Economic and Community Development Committee
“Local mom and pop shops shouldn’t be taxed at the same rate as the large commercial businesses – and this new tax subclass thoughtfully supports small shops on main streets across our city. We need to level the playing field for the small businesses who have struggled significantly during the pandemic. Thank you to the inspiring, resilient small businesses across Toronto, the BIA’s and the City staff for their hard work that allows us to start passing on this property tax reduction in 2022.”
– Councillor Brad Bradford (Beaches-East York)
Toronto is home to more than 2.9 million people whose diversity and experiences make this great city Canada’s leading economic engine and one of the world’s most diverse and livable cities. As the fourth largest city in North America, Toronto is a global leader in technology, finance, film, music, culture and innovation, and consistently places at the top of international rankings due to investments championed by its government, residents and businesses. For more information visit the City’s website or follow us on Twitter, Instagram or Facebook.
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