Toronto needs higher property taxes on most expensive homes: prof
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A Torontonian who owns a mansion on the Bridle Path pays the same property tax rate as someone who owns, or rents, a tiny bungalow in Scarborough — and for Toronto to be a fair city, one municipal tax expert says, that needs to change.
Myer Siemiatycki, a politics professor at Ryerson University, said Metro’s ward-by-ward breakdown of property-tax payments prompts critical questions about how the city distributes its property-tax burden. The ward paying the most pumps 10 times more tax — commercial and residential combined — into city coffers than the lowest-paying ward, the breakdown shows.
When it comes to residential taxes, people in the richest areas — where the property values are highest — already pay the lion’s share. Siemiatycki argues those wealthy homeowners can and should be paying even more.
Property taxes are regressive because people with lower incomes spend a higher proportion of their incomes on property taxes than those who are wealthy, despite their homes being less valuable. But a progressive tax structure — which means a higher tax rate for those who can afford to pay it — has been a foundational principle of taxation in Canada since the introduction of the income tax, he said.
“We take as a given, when it comes to something like the income tax, that the higher your income is, not only should you pay more tax, but you should also pay at a higher rate of taxation,” he said.
Toronto can’t change to progressive taxes without a change in provincial legislation. That’s something that needs to happen, Siemiatycki says.
He suggests that homeowners pay a higher rate of taxation on any value of their home over a certain threshold. If the threshold is set at $700,000, for example, a person with a home valued at $800,000 would pay a higher rate on the extra $100,000.
“And anyone lucky enough own a home over $1.5 million is going to be paying an even higher rate for that higher incremental value over $1.5 million,” he said. “That would get us to fairness among individual taxpayers.”
That change would help the city pay for things it needs, but that that the current property-tax system can't adequately fund — which, according to Siemiatycki, include transit costs, Gardiner Expressway repairs and affordable housing.
The above map indicates the relative average property taxes paid in each ward in Toronto. Wards where households pay more property tax on average, because the residential real-estate values are higher, are shown in darker green. The assessment data per ward is the Municipal Property Assessment Corporation phased-in value for 2015 and the number of dwellings per ward comes from Statistics Canada and dates from 2011.