On Tuesday April 2, the Finance and Corporate Services Committee will be asked to adopt report recommendations to approve the property tax classes and tax reductions for the 2024.
Municipalities in Ontario have the authority to apply differential taxation rates to different property classes through tax class ratios. A tax ratio is the proportion by which a class or sub-class tax rate compares to the residential class tax rate, which has a base ratio of 1.0. For example, a property with a tax ratio of 2 would pay twice the municipal tax amount as a similarly valued residential property. These ratios allow different tax burdens between the different property classes.
Why do tax ratios exist?
Ratios allow municipalities to manage the shifting of the property tax burden between classes. Annual tax shifts happen between classes due to different rates in property assessment values across different classes. The City historically adopts ratios that mitigate tax shifting and keep the tax burden the same in each property class. There are different property tax rates including shopping malls and homeowners, including condominium owners. It should be noted that renters pay a higher rate of property taxes than homeowners although they do not receive a property tax bill directly. The multi-residential property tax (of seven or more units) is paid directly by the landlord and is at a higher ratio of taxation which is passed on to tenants. When it comes to tax fairness this is inequitable especially since renters are, on average, lower income residents than homeowners. I expect to see discussion on these differentials at the committee on Tuesday morning.
Although I am not a voting member of the Finance and Corporate Services Committee, I do plan to attend and hear what staff and delegates have to say. I encourage residents to review the report recommendations here. If you would like to provide comments or sign up to speak as a delegate at the committee meeting on April 2 you can do so by contacting the committee coordinator:
Melinda Aston,
(613) 580-2424, ext. 21838
melinda.aston@ottawa.ca
