Canada: Municipal Property Tax Relief

Last Updated: September 22 2016

Introduction – City of Toronto Property Tax Relief

If you live in Toronto and are having difficulty paying your property tax you may be eligible for municipal tax relief. The City of Toronto will consider reducing or cancelling property taxes owing for a particular year if the taxpayer is unable to pay due to sickness or extreme poverty. The City of Toronto also has a program in place that allows low income seniors and low income disabled persons to defer or eliminate municipal property tax if it is the result of a tax increase. Low income seniors and low income disabled persons may also be eligible for special water rebates. Accessing these programs requires you to move quickly to meet the program deadlines and to know whether or not you meet the requirements. Our Toronto tax lawyers can help you find out if you are eligible for reducing or cancelling Toronto property taxes and make any required applications on your behalf.

Relief from Toronto Property Taxes due to Sickness or Extreme Poverty

The City of Toronto Act allows a property owner to apply to have all or part of the property taxes levied on their property reduced, eliminated, or refunded due to the owner’s inability to pay on account of sickness or extreme poverty. The application only covers one particular year and must be filed with the city Treasurer before February 28th of the year following the one with respect to which the application is made. If the application has merit it will lead to a hearing before the Assessment Review Board to give the taxpayer an opportunity to provide evidence of their illness or extreme poverty. Statistics Canada’s Low Income Cut Offs may be used as a reference point by the Board and the City when considering applications based on extreme poverty. If you require assistance applying for tax relief under this program, please consider speaking with one of our Toronto tax lawyers.

Municipal Tax Relief for Low Income Seniors and Low Income Disabled Persons

The City of Toronto offers tax relief to low income seniors and disabled persons through the deferral or cancellation of the part of their property tax bill on their principal residence that is due to a tax increase, and through the issuance of water rebates. Applications for property tax deferral, property tax cancellation, or water rebates must be filed with the Treasurer by the 31st of August in the year with respect to which the application is being made. The Treasurer has the discretion to choose to accept applications that are filed late so long as they are filed before the 31st of December of that year.

Under the property tax deferral program, the proportion of property tax owing for the current year that is a property tax increase can be deferred by an eligible person. A property tax increase is the amount by which the property tax owed in the current year exceeds the amount of property tax owed in the previous year, except for any increase in property tax which is the result of the value of the property increasing due to alterations made to the property. Property tax that is deferred under this program must be paid the following year unless another successful application is made in that year as well.

Property tax deferral will only be available if the taxpayer earns income below a specific legislated threshold, which is $50,000 of household income for 2016, and qualifies as senior or disabled. The property targeted by the application must be the taxpayer’s principal residence. Relief will not be available if there are property taxes arrears outstanding for previous years. To qualify as a senior the taxpayer needs to be at least 65 years old. If the taxpayer is between 50 and 64 years old they may qualify if they are receiving payments from a pension registered under the Income Tax Act or are receiving benefits under the Old Age Security Act. To qualify as disabled, a taxpayer needs to have a disability and be in receipt of certain disability benefits. Our team of Canadian Tax lawyers are experts at interpreting a wide variety of tax legislation and can accurately identify your eligibility for relief with respect to Toronto property tax.

If you meet the criteria necessary to qualify for a property tax deferral then you will qualify for water rebates if you have metered water services in your home and consume less than 400 cubic meters of water per year. The size of the water rebate is determined by multiplying the amount of water you consumed in a year by a rebate rate. The rebate rate is equal to the difference between Toronto’s domestic general-use rate and its industrial process-use rate. As of 2016, the current rebate rate is $1.035 per cubic meter. If you were eligible for only part of the year then your rebate will be pro rated so that you only receive a rebate for the portion of the year that you were eligible. The rebate is applied to the eligible person’s first utility bill of the following year. You may still be eligible for a water rebate even if you owe property tax arrears from previous years.

The cancellation program allows an eligible person to cancel the proportion of their property taxes for the current year that is a tax increase. As with the deferral program, a tax increase is the amount by which the property tax owed in the current year exceeds the amount of property tax owed in the previous year, excluding any increase in property tax which is the result of the value of the property increasing due to alterations made to the property.

The requirements for tax cancellation are substantially the same as for tax deferral, except for a few additional restrictions. To qualify for property tax cancellation in 2016, the taxpayer needs to have a household income of less than $38,570. The value of the property owned by the taxpayer must also have had an assessed value of less than $715,000 for 2015 and 2016, and less than $650,000 for 2013 and 2014. The definition of “senior” used for determining eligibility for cancellation is more restrictive and includes only people who are 65 or older and people between the ages of 60 and 64 who are receiving certain benefits under the Old Age Security Act.

Conclusion – Toronto Property Tax Relief

The City of Toronto offers several forms of municipal tax relief to property owners who are having difficulty making payments. If the inability to pay is a result of sickness or extreme poverty then the property owner can apply to have part or all of their property taxes for the year deferred or cancelled. The City of Toronto also allows low income seniors or disabled persons to apply to defer or cancel the portion of their property taxes that is due to an increase in their property taxes compared to the previous year. Low income seniors and disabled persons may also qualify for a special water rebate. The City of Toronto is governed by different rules than the rest of Ontario’s municipalities, but many of them have similar programs in place. If you have questions about your eligibility for Toronto’s municipal tax relief programs, or their equivalent in your municipality, please consider speaking with one of our Toronto tax lawyers. We can make detailed submissions on your behalf to ensure you receive the relief that you are entitled to.

The information is thought to be current to date of posting. Income tax law changes frequently and content may no longer reflect the current state of the law. This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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