Despite getting 50% relief, some remain concerned about the future
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A group of small-business owners along Yonge Street in Toronto have raised concerns after they saw a 100% hike in their property tax bills earlier this year.
The increase came about due to the way property taxes are determined in the city. In Toronto, taxes on commercial spaces are determined by taking the building’s assessed value and multiplying it by 2.5%, reported CBC News.
The building assessment is conducted by the Municipal Property Assessment Corporation (MPAC), a not-for-profit corporation that is responsible for assessing and classifying all properties in Ontario. According to CBC, the MPAC values properties based on what buildings have been sold nearby and at what price.
The problem for constituents, according to Councillor Kristyn Wong-Tam, is that the MPAC follows a one-size-fits-all approach. When nearby homes are selling for tens of thousands of dollars over asking, it affects prices for all types of properties in the areas.
Following the business owners’ reaction, the MPAC did a reassessment of their properties which effectively resulted in a 50% tax cut. Still, there were some who remained concerned about the future.
“It's obvious the city would like us all to go,” said store owner John Anderson, addressing a crowd at a meeting of the Yonge Street Small Business Association. “You might get through the first year and survive, but they'll get you in the second year — or the third or fourth.”
“[T]he reassessments will come out in another four years and we don't want to get caught in the cycle again,” Wong-Tam told CBC News.
Wong-Tam is reportedly working with MPAC, Toronto’s financial services staff, and Jeff Leal, Ontario’s minister responsible for small business, to try to iron out a new classification for small businesses just for Toronto.
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The increase came about due to the way property taxes are determined in the city. In Toronto, taxes on commercial spaces are determined by taking the building’s assessed value and multiplying it by 2.5%, reported CBC News.
The building assessment is conducted by the Municipal Property Assessment Corporation (MPAC), a not-for-profit corporation that is responsible for assessing and classifying all properties in Ontario. According to CBC, the MPAC values properties based on what buildings have been sold nearby and at what price.
The problem for constituents, according to Councillor Kristyn Wong-Tam, is that the MPAC follows a one-size-fits-all approach. When nearby homes are selling for tens of thousands of dollars over asking, it affects prices for all types of properties in the areas.
Following the business owners’ reaction, the MPAC did a reassessment of their properties which effectively resulted in a 50% tax cut. Still, there were some who remained concerned about the future.
“It's obvious the city would like us all to go,” said store owner John Anderson, addressing a crowd at a meeting of the Yonge Street Small Business Association. “You might get through the first year and survive, but they'll get you in the second year — or the third or fourth.”
“[T]he reassessments will come out in another four years and we don't want to get caught in the cycle again,” Wong-Tam told CBC News.
Wong-Tam is reportedly working with MPAC, Toronto’s financial services staff, and Jeff Leal, Ontario’s minister responsible for small business, to try to iron out a new classification for small businesses just for Toronto.
For more of Wealth Professional's latest industry news, click here.
Related stories:
Not what the housing market needs right now
How will clients be impacted by another interest rate hike?
