A recent post at Landlord Rescue reminded me of the problem of Toronto’s unfair property tax system that leads to Toronto tenants actually subsidizing the property taxes of Single Family home owners.
The post from “Landlord Rescue” referenced in the above tweet includes:
Tenants Actually Subsidize Home Owners.
Property tax rates in the city of Toronto on Multiresidential buildings are 1.7265482% and the tax on homeowner properties are 0.7056037%. The taxes on your average $1,000,000 house in Toronto would be $17,264 instead of the $7056 they currently are if homeowners paid the same rate as older multiresidential buildings.
Property developers have refused in the past (like any sane person would) to build rental buildings because of this inequitable tax system. Recently we have heard that condo sites like Kingsclub are converting to residential rental. Guess what? Toronto has changed their policy for new buildings and the tax rate for new rental buildings is 0.7056037% (exactly like homeowners and condos)
To make this super clear, tenants living in homes, homeowners, condo owners and new rental building tenants will all pay the lower rate but the people living in run down bedbug infested, cockroach havens older buildings that require capital improvement (subject to legal rent increases) that represent most of the affordable housing in the city are paying the much higher tax in their rent.
It couldn’t be better explained than this.
Toronto taxes – Robbing from the (in most cases) poor(er) to give to the rich(er)
What? Yes, it’s true. One of the highest costs of Toronto landlords is the high rate of property taxes applied to Toronto apartment buildings. Understand that this is a cost to Toronto landords that operates to keep residential rents higher than they should be.
Tenants have the numbers to make this inequity a political issue, but so far they have failed to do so. At least one candidate has attempted to educate Toronto tenants. But so far, there has been no interest.
The post referenced in the above tweet includes:
Toronto Tenants Pay High Rents Because of Discriminatory Tax on Tenants
“It is assumed that because rental housing is a business, that higher rates of taxation can be charged, even though those levies are passed on dollar-for-dollar to the tenants under landlord and tenant laws, and even though the majority of tenants are renters because they have lower incomes and can not afford to be homeowners. Of course, since the tax levies are ultimately paid by tenants as part of our rents, most tenants unaware of the real source of any increased taxes, nor that over 20% of our rents are in fact due to municipal property taxes.”
– http://www.ontariotenants.ca/taxes/toronto-property-taxes.phtml
You can see the difference in the tax rates here.
I am amazed that that few people seem interested in this issue. If you are a Toronto tenant or landlord you need to make your voice heard. Along with this video, you should read an earlier post I wrote about how tenants and landlords pay higher costs because of the discriminatory property taxes on apartment buildings.