Non-Residential Property Tax Strategies

Tax Capping & Clawback

Capping/Clawback Adjustments to Non-Residential Properties

Tax capping refers to limitations on annual property tax increases for certain commercial, industrial and multi-residential properties.

Tax Policies Approved by Council

In a continuing effort to help protect businesses from property tax increases arising from the recent reassessment, City Council adopted recommendations in item EX22.4 that continues to provide capping protection for eligible properties in 2026.

Tax Capping and Clawback Policies

• Properties in the commercial, industrial and multi-residential tax classes that are within $500 (plus or minus) of their full Current Value Assessment (CVA) taxes will be taxed at the full CVA tax level.
• Properties in the commercial, industrial and multi-residential tax classes will continue to see property tax increases limited to 10 per cent of the preceding year’s annualized taxes, plus a portion of Council’s approved budgetary rate increase.
• Properties previously at full CVA taxation levels may be eligible for capping protection.
• To fund the caps on tax increases, properties subject to assessment related tax decreases will continue to have a portion of the tax decrease withheld (clawed back) as in prior years.

Tax Rate Reduction

As part of its overall strategy to enhance Toronto’s business climate, the City reduced its tax rates for commercial, industrial and multi-residential properties toward an approved target of 2.58 times the residential tax rate. The City reached the targeted tax ratio for industrial properties in 2023, followed by commercial properties in 2024.

Business Education Tax Rate

The Ontario government requires municipalities to levy a lower education tax rate for newly constructed commercial and industrial buildings in municipalities (like Toronto) where the provincial education tax rate remains above the provincial average.

To learn more, visit the Ontario Government web page to determine if your project qualifies for this tax reduction.

Business Improvement Areas

If your tax bill includes a Business Improvement Area (BIA) levy amount, it is because your property is located within the boundary of a designated BIA. Annually, each BIA approves a budget that is used to beautify the neighbourhood and promote it as a place to shop, visit or do business. All commercial and industrial properties located within the boundaries of a BIA are automatically members and must pay the BIA levy amount.

The various BIA incentive programs include:

• Commercial Façade Improvement Program
• Outside Mural & Street Art Program
• Streetscape Improvement Program
• Streetscape Master Plan Program

Find out more about Toronto’s Business Improvement Areas and access the BIA List for locations and boundaries.