Small Business Property Tax Subclass

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In November of 2021, Toronto City Council adopted the report Implementing a Small Business Property Tax Subclass, which provides a reduction in the tax rate for eligible small business properties. The Province of Ontario will provide a matching reduction in the provincial education portion of property taxes for eligible properties.

Business property owners whose property has been included in the small business property tax subclass do not need to take any further action – the small business subclass classification and reduction in tax rates will be reflected in your final property tax bill.

Tenants of eligible small business properties should speak to their landlord about receiving this reduction.

Learn more about available funding and programs to help Toronto businesses thrive.

To be eligible for inclusion in the Small Business subclass, a property must meet either of the criteria set out below, depending on the location of the property.

Property location Criteria to qualify for the subclass
Anywhere in the city
  1. Property must be classified within the Commercial or New Commercial Property Tax Class (CT or XT classification), with certain property types excluded – refer to note 1 below.
  2. Current Value Assessment (for 2025 taxation year)
    must be $10,000 or more and $1 million or less
Properties located within Downtown and Central Waterfront, Growth Centres, and/or Avenues (refer to note 2 below)
  1. Property must be classified within the Commercial or New Commercial Property Tax Class (CT or XT classification), with certain property types excluded – refer to note 1 below.
  2. Current Value Assessment (for 2025 taxation year)
    must be $10,000 or more and $7 million or less.
  3. Lot size must be 7,500 square feet or less
    or
  4. Gross Floor Area (GFA) of 2,500 square feet or less (applies only to commercial condominiums).
 

Strip Plaza Anywhere in the City

 Identified strip plaza properties where the following criteria are satisfied:

  1. Property must be classified within the Commercial or New Commercial Property Tax Class (CT or XT classification), with certain property types excluded – refer to Note 1 below.
  2. The property is categorized by the Municipal Property Assessment Corporations as one of the following Property Codes: 425 Neighbourhood Shopping Centre with anchor, 429 Community Shopping Centre, or 430 Neighbourhood Shopping Centre without anchor.
  3. The property has two or more attached retail establishments and shared or common parking areas.
  4. The current Value Assessment of the property is $10,000 or more and $7,000,000 or less,
    And
  5. The property has a site area of less than or equal to 25,000 square feet, and a gross floor area of less than or equal to 25,000 square feet.

Note 1:  The following property types are not eligible to be included in the Small Business subclass: Properties classified within the office building, shopping centre, parking lot and vacant land classes, land already classified within the Creative Co-location Facility subclass or Vacant Land subclass, property that does not contain an affixed building or structure, and land for which a demolition permit has been issued.

Note 2:  To be eligible, properties must be located within the geographic areas identified as Downtown and Central Waterfront, Avenues or Centres on the map titled: Designated Areas for the City of Toronto Small Business Subclass.

Right to Audit

At any time after the Program Administrator determines that a property should be included in the small business subclass, the Program Administrator my conduct an audit to verify that the property continues to meet the eligibility criteria. Properties that experience changes during the year may become ineligible. This may occur due to changes in assessment value, usage, tax classification or other changes affecting eligibility.

On January 2, 2025, a list of eligible properties included in the Small Business subclass was made available through the City’s Open Data portal.

Business property owners do not need to apply for the small business subclass tax relief. However, properties that may meet the eligibility requirements for the small business subclass, and are not included on the list of eligible properties, may submit a written Request for Reconsideration.

Right to Dispute

Property owners who believe they have an eligible property that has not been included in the Small Business subclass have the right to file a Request for Reconsideration and/or an Appeal. Tenants cannot dispute.

Request for Reconsideration (RfR)

On January 2, 2025 a list of eligible small business subclass properties was made available through the City’s Open Data portal. Property owners have 90 days to submit a request for reconsideration. April 2, 2025 is the deadline to submit a Request for Reconsideration for the 2025 tax year, no late submissions can be accepted.

Required Information

  • Property and ownership information including assessment roll number, street number and street address and owners name(s).
  • Contact information (name, business email, phone number), if agent is acting on your behalf – provide authorization.
  • The reason for the dispute and all supporting documentation.

Submit request by:

Fax: 416-696-3424 Tips on faxing.

In-person:  Inquiry & Payment Counters

The Program Administrator will determine requests for reconsideration regarding inclusion and provide a letter of determination, in accordance with City of Toronto by-law 982-2023, amended Article 12 of Chapter 767, Taxation, Property Tax, of the City of Toronto Municipal Code and Ontario Regulation 282/98.

Appeal Process

Once a determination is made through the RfR process, if the property owner is not in agreement with the decision, an appeal form may be submitted to the Appellate Authority, within 90 days of the issuance of the determination. The Controller has been appointed by City Council to hear appeals related to the Small Business tax subclass. In addition, the Appellate Authority may extend the deadline for filing a RfR if there are extenuating circumstances. Hearings of the Appellate Authority are in writing.

When you fax this form to the Appellate Authority you are required at the same time to fax it to the Program Administrator at 416-696-3427 and 416-696-3424. To learn more about the appeal process, refer to Appellate Authority’s Rules or Procedures.

For inquiries about filling an appeal form contact a Customer Service Representative for assistance.

Tax Rate Reduction

For the 2025 tax year, the tax rate reduction for eligible properties within the small business subclass is 15 per cent of the commercial rate.

Regulations were enacted on May 7, 2021, and January 18, 2022

  • Reg. 331/21 (amending O. Reg. 282/98 under the Assessment Act) establishes the optional small business property subclass.
  • Reg. 333/21 (amending O. Reg. 121/07 under the City of Toronto Act, 2006) establishes sets the maximum municipal reduction factor at 35 per cent.
  • Reg. 11/22 (amending O. Reg. 400/98 under the Education Act) establishes the education tax rates for 2022 and prescribes a 15 per cent education tax rate reduction for properties in the Small Business subclass for Toronto.