Just under 30% of Toronto rental households are eligible for an automatic rent reduction, following tax reductions on buildings built before Nov. 1, 1991. Property taxes on these older buildings have been lowered by over 2.49 per cent.
The move comes as the city strives to make business and residential tax rates in line, in the process, reassessing rental properties considered businesses.
Landlords are meant to pass on that property tax savings to their tenants, who received market rent reduction notices directly. The envelopes, addressed to “Current Tenant,” with a city of Toronto logo for ease of recognition, allowed recipients to start paying lower rent as early as December 31.
Mayor Rob Ford has billed the change in property taxes as a way helping ease the property tax burden on Torontonians.
“We are committed to making Toronto a more affordable place to live, work and invest,” said Ford, “so, our 2013 Budget will keep multi-residential rental property tax increases as low as possible. This is great news for renters, because low taxes on rental properties help keep rents low in Toronto.”
That said, the overall reduction will be marginal. For a two-bedroom apartment in Toronto, the average rent being $1,135, tenants would save just under $7 a month.
Still, landlords who don’t pass on that savings will run afoul of the City of Toronto, caution officials.