Toronto Seeking New Small Business Tax Class to Offer Relief to Small Business

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City of Toronto staff report lays groundwork for a new small business tax class in Toronto

TORONTO – NEWS – “Small businesses are the heart of this city,” states Toronto Mayor John Tory. “These last 19 months have been extraordinarily tough for small business owners in Toronto. This new tax class will support new and existing small businesses located on Toronto’s main streets, helping them to thrive in a post-pandemic environment and well into the future. We want small business owners to know we support them and we are committed to their prosperity.”
Today, Mayor John Tory has announced a City of Toronto staff report going to Executive Committee next week recommends that a small business tax subclass be created starting in 2022 to provide small businesses with tax relief.
As part of the 2020 provincial budget, municipalities were given the ability to create a small business tax subclass to provide a lower property tax rate for small businesses within the commercial tax class. Earlier this year, City Council directed City staff to define and develop a small business tax subclass to address the preservation and rebuilding of Toronto’s main streets and to offer tax reductions for a broad range of small businesses across Toronto.
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.
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 in the City’s Official Plan
• 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.
This tax will be revenue neutral for the City. The provincial government is expected to match the municipal tax rate reduction with a corresponding reduction in the business education tax for all eligible small business property owners.