Wednesday, September 16, 2009

Toronto Condominium Taxation

Condominiums, even though they have been around for quite sometime in Ontario, have only modestly grown in the past and mostly only in urban areas. However, all that started to change in the late 1980’s when growth in condominium development began to expand. This growth increase almost seemed to double each year. In fact, in many urban areas, especially in the Greater Toronto Area, they have almost come to supplant single family residences as the preferred form of residential accommodation. Maclean’s Magazine, in its December 31st, 2007 issue, featuring real estate in Canada, postulated that half the people in urban Canada will be living in condos by 2025.

This growth has lead many urban municipalities to allocate an ever increasingly larger proportion of larger building permits to condominium development. Since condominium developments, specifically high-rise condominiums, utilize less land area, they have also become an excellent planning tool for the urban municipality, enabling them to accommodate more people in a smaller land area. Although this growth in condominium developments has increased, almost exponentially in recent times, one aspect of condominium life has not changed, namely assessment on condos for the purpose of municipal taxes.

EACH CONDOMINUM UNIT IS STILL ASSESSED AS A SINGLE-FAMILY RESIDENTIAL UNIT FOR THE PURPOSES OF THE MUNICIPAL TAX BILL. This is the case because the assessment act of Ontario (the Legislation which specifically covers the way properties are assessed in Ontario for municipal and school taxation purposes) does not identify condominiums as a specific category of assessment. Thus a condominium-specific tax rate cannot be created by the local municipality, since the municipality can only do those things granted by the provincial legislation. Since the assessment act of Ontario does not permit a distinct category of assessment for condominiums, the municipality does not have the authority create a specific tax rate for authorities even if they wish to do so.

Toronto Condominium Taxation

David Pylyp; With the number of Toronto Condos nearing 50% maybe this idea is indeed timely. Please feel free to add your comments.

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