Today, 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.
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
Businesses located anywhere else in the city
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.
The report can be found here.
“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.”
– Mayor John Tory
“Supporting tax relief for small businesses is the right thing to do. Any incentives that we can create to attract and keep small businesses on our main streets is beneficial for all of Toronto. Small businesses, whether it’s the local coffee shop, hair salon or restaurant are the backbone of Toronto neighbourhoods – and tax policies like this one will ensure their success today and into the future. Successful small businesses equal a thriving Toronto.”
– Councillor Gary Crawford (Scarborough Southwest), Chair of the Budget Committee
“We’re committed to a strong and successful post-pandemic Toronto. Any measures that we can take that support local, main street 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 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
“This is about creating fairness for small businesses within our commercial property tax class. Local mom and pop shops shouldn’t be taxed at the same rate as the large commercial businesses. This step forward is about levelling the playing field for the small businesses who have struggled significantly during the pandemic. We need to continue the work to support them into a strong recovery.”
– Councillor Brad Bradford (Beaches-East York)
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