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MARKET INSIGHT FOR THE WEEK ENDING February 14th, 2025
Property taxes and tariffs were a major focus for Toronto city councillors this week as they gathered on Tuesday to finalize the 2025 budget. Despite an array of proposed amendments, many of which did not pass, Mayor Olivia Chow’s version of the budget—initially presented on January 30 and consisting of an $18.8-billion operating budget alongside a $59.6-billion capital plan—was largely approved with minimal alterations.
Unsurprisingly, the standout feature in this year’s budget was the 6.9% rise in residential property taxes. This includes a 5.4% hike to support the City’s operational expenses for the year, coupled with a 1.5% building levy dedicated to advancing crucial infrastructure projects. According to City estimates, this will equate to an annual increase of approximately $210 for a Toronto home assessed at the average value of $692,031, or about $17.50 per month.
In addition to the base property tax increase, which includes a 2.7% hike for both multi-residential and commercial properties and a 5.4% boost for industrial properties, the residential tax rate increase was passed by Council in a 19 to 5 vote.
The approved 6.9% rise follows last year’s controversial 9.5% property tax increase (8% plus the building levy), the steepest hike since the city’s amalgamation. While this year’s increase is more in line with the 2023 increase under former Mayor John Tory, who implemented a 5.5% hike (7% including the building levy), it still marks the third consecutive year of notable increases. For reference, the increase in 2022 was just 2.9%.
Meanwhile, Ward 19 Councillor Brad Bradford (Beaches–East York) put forward a last-minute motion on Tuesday aimed at offering tax relief to businesses affected by US President Donald Trump’s tariffs, which take effect on March 12, with the potential for additional levies down the line. Bradford proposed a 25% reduction in the industrial property class tax rate, which would have required reallocating $30.4 million from the City’s $5.64 billion property tax revenue.
To balance this decrease, Bradford suggested a one-time withdrawal from the Tax Rate Stabilization Reserve. However, his motion was ultimately rejected, with Mayor Chow expressing her reluctance to dip into the City’s “rainy day” funds.
In a press release issued Tuesday afternoon it lays out where the City will be investing it’s $18.8 billion operating budget in the coming year. On the housing front, this includes a $1-million allocation to the Rent Bank, expected to assist up to 2,700 households, an $800,000 investment in existing eviction prevention programs, and a $712,800 boost to tenant support services.
Additionally, the City plans to allocate funds to enforce its newly introduced renoviction bylaw, passed in November, and will waive development charges to facilitate the creation of 8,000 affordable homes while expediting the construction of 6,000 rental units.