Toronto has the lowest property tax rate of 35 major Ontario cities, a recent study has found.
The study, conducted by real estate brokerage company Zoocasa, found Toronto, at roughly 0.615 per cent, beat Markham (0.660 per cent), Milton (0.686 per cent) and Richmond Hill (0.686 per cent) for the lowest spot.
The cities with the highest property tax rates were Windsor, at 1.789 per cent, followed by Thunder Bay (1.598 per cent), Sault Ste. Marie (1.529 per cent) and North Bay (1.501 per cent).
That means, according to the study’s calculations, a house priced at $500,000 in Toronto, for instance, requires owners to pay $3,074 in property taxes, whereas a house priced at the same amount in Windsor requires $8,947 in property taxes.
City Councillor Gord Perks says Toronto’s low tax rate may seem like good news for homeowners, but it’s coming at the cost of city services.
“Toronto is facing a number of serious challenges that cost money, and keeping our taxes down means we don’t fix housing, we don’t fix transit, we don’t provide good recreation and we don’t improve community services,” Perks said.
According to a separate recent study out of Ryerson University, Toronto homeowners could pay 20 per cent more in property taxes and still be paying less than their counterparts in half the municipalities around them.
“Anytime you’ve been frustrated by something that’s not working in the city, maybe it’s housing affordability, maybe it’s public transit, maybe there are too many potholes, that’s because our property taxes are too low,” Perks said.
The study comes four months after the City of Toronto passed a budget that kept property taxes at around inflation, a promise Mayor John Tory campaigned on.
Harry Kitchen, a professor of economics at Trent University, said one of the reasons the property tax rate in other cities is higher than in Toronto is because their real estate prices are significantly lower. The Zoocasa study found the average cost of a Toronto home to be $915,481, whereas Windsor’s average home price is $337,923.
The City of Toronto also charges for water consumption and garbage pickup on a separate bill, while some municipalities in Ontario include it on the property tax bill. Still, he said even accounting for that discrepancy, Toronto still has among the lowest rates in the province.
He said raising property taxes could hurt the people he refers to as “asset-rich and income-poor.”
“Those are the people that could be living in a house on low income or low retirement income, and since they’re in Toronto, the property value is rising dramatically,” he said.
“If the property tax was raised to what it is in, say, Peterborough (1.410 per cent), then suddenly those people are paying a hell of a lot more in property taxes and they probably wouldn’t be able to afford it,” he said.
Perks, however, said people with low incomes or retirement incomes can have their property taxes deferred or forgiven through governmental programs.
“What those people do need, however, is access to services like public transit, or recreation programs or a robust public health department, all of which they can get with a tax increase,” Perks said.
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Jacob Lorinc is a breaking news reporter, working out of the Star’s radio room in Toronto. Follow him on Twitter: @jacoblorinc