November 14, 2021: City Council has approved the new Small Business Property Subclass, coming into effect for the 2022 tax year. Small business property owners across Toronto that fall within the tax class (eligibility below) will automatically see a 15% reduction in property taxes.
This initiative is a long time coming and something that this BIA and TABIA (our umbrella organization) have been fighting toward for several years. We listened to you, our members, every time you raised your concerns about unfair property taxes. It is estimated that property tax reductions will apply to approximately 25,000 small businesses across Toronto, or 60% of all commercial properties.
Eligibility: Businesses must fall under the following criteria to be eligible: Businesses located downtown, on the central waterfront, in designated growth centres or avenues (the Junction) in the City of Toronto’s Official Plan.
- Properties must be classified within the commercial or new commercial tax class (with certain property types excluded).
- Properties must have a Current Value Assessment (CVA) of less than or equal to $7 million.
- Lot size must be 7,500 square feet or less, or for commercial condos a gross floor area of 2,500 square feet or less.
- For example, a small business located in the city’s downtown or on an avenue in the Junction with property assessed at $3 million and meeting the lot size limit would see a tax reduction of more than $8,500. City Council has also directed the CFO and Treasurer to report in the first quarter of 2022 on the feasibility of developing a mechanism to ensure that property owners with tenants in gross leases pass down the benefits of reduced property taxes to their tenants.
Small business property owners do not need to apply for this tax relief, as all commercial properties will be assessed for eligibility. A request for reconsideration or appeal process will be available for those who feel that their property should be included in the new tax subclass.
The report “Implementing a Small Business Property Tax Subclass”, which Council considered today, can be found here.
This is news that all Torontonians can look forward to and is a big step towards preserving our main streets. Please reach out to us if you have any questions.
