2022 Education Property Tax Levy and Clawback Rate By-Law

The costs of capping protection will be funded by withholding (clawing-back) a portion of the tax decreases that would otherwise be experienced by other properties within each class, as has been the City's practice since 1998, and for 2022 for the first time since capping policies were adopted in 1998, by a one-time draw from the Tax Rate Stabilization Reserve to fund a shortfall in available clawback within the multi-residential tax class. This report recommends the percentage of the tax decreases that must be withheld (the 'clawback' rates) in order to fund the capping limit on properties in the commercial, industrial and multi-residential property classes, as provided for by legislation.

121/07: Column I Column II Property Class 2022 Tax Rates for Education Levy Residential 0.153000 percent Multi-Residential 0.153000 percent New Multi-Residential 0.153000 percent Commercial 0.880000 percent Commercial Shared Payment-in-Lieu 0.980000 percent Industrial 0.880000 percent Industrial Shared Payment-in -Lieu 1.0672200 percent Pipelines 0.880000 percent Farmlands 0.038250 percent Managed Forests 0.038250 percent 2. City Council adopt the following property tax capping polices for the 2022 taxation year: a. limit tax increases for the commercial, industrial, and multi-residential property classes by capping taxes at 10 percent of the preceding year's annualized taxes, by opting to have subsection 292(1), paragraph 1, of the City of Toronto Act, 2006, apply for the 2022 taxation year; b. continue to provide that the 10 percent cap on tax increases apply to any property within the commercial, industrial and multi-residential classes, regardless of whether the property had reached full Current Value Assessment taxation levels in a prior year, subject to the threshold adopted in Part c. below. c. for the purposes of subsection 292(1), paragraphs 3 and 4 of the City of Toronto Act, 2006, adopt a threshold limit of $500 to determine the taxes for municipal and school purposes, such that properties that are within $500 (plus or minus) of their full Current Value Assessment level of taxation in the current year are taxed at full Current Value Assessment taxation levels for the year, and are therefore excluded from capping/claw-back provisions for that year. 3. City Council adopt reductions in tax decreases for the 2022 taxation year on properties in the commercial, industrial and multi-residential property classes by the percentage of the tax decrease set out in Column II in order to recover the revenues foregone as a result of capping, and to allow the decrease percentages set out in Column III: Column I Column II Column III (Property Class) (Clawback Percentage) (Allowable Decrease) Commercial 81.187053 percent 18.812947 percent Industrial 70.963057 percent 29.036943 percent Multi-residential 100.00 percent 0.00 percent 4. City Council authorize a one-time draw from the Tax Rate Stabilization Reserve in 2022 to maintain Council's previously approved 2022 municipal tax levy and the education levy set out in Recommendation 1, in an amount sufficient to fully offset any shortfall in the clawback amount for the Multi-Residential property tax class for the 2022 taxation year, in order to maintain consistency with Council's tax capping policies from prior years, in an amount not to exceed $47,000. 5. City Council authorize the introduction of the necessary bills in Council to give effect to Council's decision.