Commercial property owners are overburdened with tax says Altus

Owners of commercial real estate are carrying a disproportionate property tax burden across Canada according to a new report.

The Altus Group’s analysis in association with the Real Property Association of Canada (REALPAC) looks at property tax rates in 11 major urban centres across the country.

The report reveals that in eight of the 11 cities surveyed, commercial tax rates are at least double those of residential tax rates. This indicates that a commercial property would incur property taxes more than twice the amount of an equally valued residential property.

The highest burden is in Vancouver, where the commercial-to-residential tax ratio is in excess of 4:1 despite posting the largest decrease of 9.721%.

The largest increases in 2018 were in Calgary (up 11.950%) and Quebec City (up 7.380%) while Toronto and Montreal join Vancouver with the highest commercial-to-residential ratios in the country of near 4:1.

Quebec City has one of the highest estimated commercial taxes per $1,000 of assessment at $36.09, just below Montreal which remains the highest of all cities surveyed at $37.76.

Multifamily taxes
The report also looks into the property tax ratio on multi-residential properties, comparing the residential property tax rate to the multi-residential property tax rate.

It found that Ontario renters are carrying a disproportionate burden of property tax.

While multi-residential building owners are being taxed equally to homeowners in most of Canada, Ontario cities are showing that apartment buildings built before 1998 carry significantly higher ratios with Ottawa at 1.358 and Toronto leading the pack at 2.069.

The higher levels of taxation on older multi-residential buildings can pose a potential challenge for landlords needing to fund repairs and maintenance, and as a result, are often passed onto tenants through increased rent.