Small business tax class
On October 27, the Executive Committee will be reviewing a City of Toronto staff report recommending that a small business tax subclass be created starting in 2022 to provide small businesses with tax relief. The 2020 provincial budget gave municipalities the ability to create a small business tax subclass to provide a lower property tax rate for small businesses within the commercial tax class.
The report recommends that a 15 per cent tax reduction be applied to small businesses within the commercial tax class. The remaining properties in the commercial tax class will see a property tax rate increase of 0.85 per cent in the municipal portion of property taxes to fund the tax relief. It is estimated that these reductions will apply to approximately 25,000 small businesses across Toronto, or 60 per cent of all commercial properties. $26.87 million in relief.
To qualify to be a part of this tax subclass, business are separated into two categories:
- Businesses located downtown, on the central waterfront, in designated growth centres or avenues on the City’s Official Plan (The Junction BIA Businesses)
- properties must be classified within the commercial or new commercial tax class
- properties must have a Current Value Assessment (CVA) less than or equal to $7 million
- lots must be 7,500 sq. feet or less, or for commercial condos a gross floor area of 2,500 sq. feet or less
- Businesses located anywhere else in the city
- properties must be classified within the commercial or new commercial tax class
- properties must have a CVA less than or equal to $1 million
There is no application needed for this tax relief as all commercial properties will be assessed for their eligibility. There will also be a request for reconsideration or appeal process for properties owners who feel their property should be included in the new tax subclass
