Property taxes are paid by both business property owners and residential property owners, however the rates they pay vary because they are set at the discretion of taxing authorities. The ongoing challenge that governments face is to find ways to fund municipal budgets while at the same time balancing the perceived fairness between commercial and residential taxpayers.
For over 17 years,
The average commercial-to-residential tax ratio for the cities surveyed in 2020 was 2.65, a positive trend reflecting a -6.56% decrease from 2.84 in 2019. This decrease was largely driven by significant reductions in the
Year-Over-Year Commercial-to-Residential Tax Ratios | |||
City | 2020 | 2019 | % Change 2019 to 2020 |
4.106 3.621 3.454 2.877 | 3.931 3.703 3.434 2.870 | 4.451 -2.213 0.580 0.262 | |
Average | 2.652 | 2.838 | -6.563 |
2.580 2.455 | 3.310 2.509 | -22.045 -2.154 | |
2.382 | 2.406 | -0.989 | |
2.301 1.941 | 3.643 1.962 | -36.842 -1.095 | |
Regina | 1.740 | 1.742 | -0.097 |
1.716 | 1.713 | 0.180 |
“While the decrease in the overall average commercial-to-residential ratio is a positive step in the right direction, more action needs to be taken by governments in particular regions where the ratio has been steadily increasing,” said
Market-By-Market Trend Analysis
Montreal ’s commercial-to-residential tax ratio first rose above the average in 2008 and has been steadily climbing since. For the second consecutive year,Montreal has remained the city with the highest ratio, currently sitting at 4.11. The city’s ratio rose 4.45%, the largest ratio increase in the 2020 survey, to sit above 4.0 for the first time.Toronto continued its 16-year trend of decreasing its commercial-to-residential tax ratio with a -2.21% decline.Quebec City ’s commercial-to-residential tax ratio moves from fourth to the third highest of all cities surveyed. In 2019, its ratio decreased by -3.75%, reversing a 15-year trend; however, in 2020, the ratio increased by 0.58%Halifax ’s commercial-to-residential tax ratio has slowly been increasing over the past few years. It now sits above the average for the second consecutive year.Calgary saw the second largest ratio decrease of all 11 cities at -22.05%, ending a six-year trend of consecutive increases. The decrease in the ratio was a result of a significant increase in the residential rate (13.05%) and a significant decrease in the commercial tax rate (-11.87%).Ottawa ’s commercial-to-residential tax ratio has been decreasing since 2017. For the eleventh consecutive year, it sits just below the average ratio at 2.45.Edmonton sits below the average with a commercial-to-residential tax ratio of 2.38 and has remained relatively stable over the last five years.Vancouver posted the largest increase in the residential tax rate (14.23%), the largest decrease in the commercial tax rate (-27.85%) and, as a result, the largest decrease in the commercial-to-residential tax ratio (-36.84%) of all 11 cities surveyed. This ratio decrease tookVancouver from the third highest ratio in 2019 to the fourth lowest in 2020. Additionally, for the 20 years prior to 2019, Vancouver’s ratio was above 4:1.Winnipeg continues to be the third lowest of the 11 cities with its commercial-to-residential ratio remaining relatively flat at 1.94.- Regina remains quite stable posting a 1.74 commercial-to-residential tax ratio.
Saskatoon continues to have the lowest commercial-to-residential tax ratio at 1.72, a very slight increase from last year’s ratio of 1.71.
Municipal vs. Provincial Components of Tax Ratio
New for 2020, the report provides an in-depth analysis into the tax ratios of the 11 cities surveyed to deliver greater visibility into what is driving their ratios.
The total tax rate in each city, for both commercial and residential properties, is comprised of two components: 1) a rate for Municipal Taxes and 2) a rate for Provincial Taxes (primarily funding public education). By calculating separate tax ratios for each of these two components, it provides better insight into which level of government (municipal or provincial) is primarily responsible for the high ratio or to be credited for the lower ratio in a city.
In 2020,
A copy of the
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Source:
2020 GlobeNewswire, Inc., source