2025 Education Property Tax Levy and Clawback Rate By-Law

This report recommends adoption of the 2025 education tax rates and education property tax levy for school purposes, as required by legislation. The City of Toronto levies and collects education taxes on behalf of the Province of Ontario, based on the education tax rates set out in Ontario Regulation 400/98, as amended. The education property tax rates prescribed by the Province for 2025 remain unchanged from the previous year for all classes. Accordingly, the average household will see no increase in their education tax this year. In addition, this report addresses the requirements associated with the clawback rate for properties in the commercial, industrial, and multi-residential property classes. In February 2025, City Council adopted the continued policy of limiting ('capping') allowable tax increases to a maximum of 10% of a property's prior year's annualized taxes for properties in those classes with a property tax bill increase greater than $500. This capping policy protects commercial, industrial, and multi-residential properties from significant annual tax increases. In order to capture the lost revenue from properties that are capped, the City annually calculates a clawback rate that effectively results in withholding part of a property's decrease due to reassessment, as applicable. This report recommends the 'clawback percentage', which represents the amount the City will retain from any decreases in property tax bills, to offset the capping policy. As a result, properties that would otherwise see a tax reduction due to reassessment may not receive the full decrease, since a portion is withheld to help offset the revenue lost from capped tax increases on other properties. Given the Province continues to postpone reassessment, the number of properties impacted by this policy is minimal in 2025.

is to be retained by the City pursuant to Ontario Regulation 121/07: Column I Column II Property Class 2025 Tax Rates for Education Levy Residential 0.153000% Multi-Residential 0.153000% New Multi-Residential 0.153000% Commercial 0.880000% Commercial Shared Payment-in-Lieu 0.980000% Industrial 0.880000% Industrial Shared Payment-in -Lieu 1.067220% Pipelines 0.880000% Farmlands 0.038250% Managed Forests 0.038250% 2. City Council adopt reductions in tax decreases for the 2025 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 2025 Clawback Percentage 2025 Allowable Decrease Commercial 75.698772% 24.301228% Industrial 75.711863% 24.288137% Multi-residential 39.089049% 60.910951% 3. City Council authorize the introduction of the necessary Bills in Council to give effect to Council's decision.