Item - 2024.EX16.8

The Executive Committee:  

1. Received the report (July 2, 2024) from the Chief Financial Officer and Treasurer for information.

As part of the 2024 Ontario Budget, the Provincial government announced that municipalities now have the ability to offer an optional reduced municipal property tax rate specifically for new multi-residential developments, whose units have been built or converted from a non-residential use. This measure mainly intends to support the development of much needed purpose-built rental housing and is aligned with the City of Toronto’s efforts to incentivize the creation of new purpose-built rental homes, including rent-controlled and affordable rental homes.

Ontario Regulation 140/24 was filed to create an optional New Multi-Residential Property (Municipal Reduction) Subclass. Should a subclass be introduced, it would not apply to existing new multi-residential class properties, those currently under construction, or those with pre-existing permits. Rather, future purpose-built properties could be offered a property tax discount of up to 35% of the municipal portion of the existing New Multi-Residential Property Class rate. In the City of Toronto, that rate is currently the same as the residential property tax rate.

At its meeting on April 9, 2024, while considering Item “EX13.17 – Tax Fairness for New, Purpose-Built Rental, the Executive Committee requested the Chief Financial Officer and Treasurer report back on legislative changes related to property taxes levied on multi-residential properties, with the objective of fair taxation across multi-residential typologies. This report provides information related to the newly proposed optional New Multi-Residential Property Subclass and the requirements for the City to adopt a subclass. Any potential recommendations to introduce a subclass will be brought forward for Council’s consideration during the 2025 budget process in the annual Property Tax Related Matters report.