Archive for December, 2012

Toronto’s property tax rates vs the GTA’s

People love to say that, since Toronto’s residential property tax rate is the lowest in the GTA, there’s a lot of room to increase it, even just to the average. (For reference: Toronto’s property tax rate is 0.7929218%; the average GTA tax rate is 1.13843887391304%.)

2011 GTA residential property tax rates

What these people are ignoring is that property tax rates are only half of the equation. In order to find out how much it actually costs individual taxpayers, you have to multiply the tax rate by the property value. And, as it turns out, average property value in the GTA isn’t the same in different cities.

GTA residential property tax burden

When you look at what the average property owner actually pays, you find that Toronto’s tax burden is not the lowest in the GTA. By my calculations, the average annual property tax in the GTA is $5,139; those same calculations show Toronto’s average annual property tax as $4,392. (I believe all these values include the education amount.)

I’d say that Toronto’s tax burden is fairly middle-of-the-road; it’s within 1 standard deviation of the average.

Were we to increase Toronto’s property tax rate to the GTA’s average, Toronto’s average tax burden would increase to $6,306, an increase of $1,913&emdash;43%.

Increasing Toronto’s property tax burden to the GTA’s average would be an increase of $747, or 17%.

I don’t believe that Toronto’s tax rates need to increase significantly over inflation. Doing so would penalize Toronto’s property owners instead of raising money from everyone who lives in and visits Toronto.

Sources: For property values, frequently realtors publish recent sales prices. It is very difficult to find average property values, unfortunately, so I used sales prices as a proxy for property values.

2011 tax rates are on

Finally, here is my working spreadsheet, including all souce data I used and the charts.