Protecting Local Businesses in Areas of TransitionPublished on March 03, 2020
TORONTO – Robin Martin, Member of Provincial Parliament for Eglinton-Lawrence, introduced legislation today that, if passed, will create new legislative tools enabling municipalities to address business concerns related to the impact of speculative sales on MPAC’s property assessment values.
“I have had the opportunity to speak with many business owners across my riding, along Yonge Street, Avenue Road, Dufferin Street, and Eglinton Avenue, and have heard one common theme –increases in municipal property taxes driven by speculative property assessments have made it difficult for them to get ahead,” said Martin.
Business properties located in areas experiencing strong redevelopment activity can face increases in assessed property values due to the speculative sales activity of nearby properties. As a result, these businesses may face large property tax increases despite the fact their business activity has not changed.
“Locally, this issue is compounded by the fact commercial property taxes in the City of Toronto are 3.8 times higher than on residential properties, placing a higher proportional tax burden on small business owners compared to other GTA municipalities,” added Martin.
Bill 179, the Assessment Amendment Act (Areas in Transition), if passed, will require MPAC to adjust its valuation approach in a municipally-designated “area of transition” to limit the influence of speculative activity. This could work in conjunction with existing property tax policy tools, such as business tax capping.
Municipalities would have the flexibility to designate both a broader “area of transition” and the specific commercial or industrial properties within the area that this measure would apply to, allowing them to target these measures to the unique circumstances of each community.
The proposed changes in Bill 179 support and build on the government’s efforts to create a competitive business environment, including a reduction of the small business corporate tax rate from 3.5 per cent to 3.2 per cent effective January 1, 2020.