Toronto residents could see a hefty 10.5% property tax hike as a result of this year’s budget deliberations, which will take place over the coming weeks.

City Councillor Shelley Carroll, who is also budget chief for the City, confirmed the proposed increase on Wednesday morning. Prior to today, Carroll had only hinted at the increase, telling reporters earlier this week that it would be “substantial.”

The proposed hike is higher than the city has seen in several years. For some context, former Toronto Mayor John Tory raised the property tax rate by just 2.9% in 2022 and by 5.5% in 2023. Though last year’s hike was the highest since the city's amalgamation, it was still below Toronto's 6.6% rate of inflation.

Carroll says that the City is taking a more aggressive stance on property taxes because of Toronto’s enormous operating shortfall, which is estimated at close to $1.8B and is being exacerbated by growing demand for refugee claimant support and shelter spaces, as well as decreased transit revenues.

In light of those pressures, City staff have prepared a property tax increase of 9% for residential properties, “which allows for better alignment with other Greater Toronto and Hamilton Area municipalities,” according to a press release from the City.

“This amounts to an increase of $321 annually for the average assessed value of a Toronto home or the equivalent to a monthly increase of $26.75.”

On top of the 9%, a 1.5% increase for the city building levy has been proposed, the release also says, which would bring the overall property tax increase to 10.5%.

In speaking to reporters on Wednesday morning, Carroll said that the property tax rate is not set in stone, and could actually end up being quite a bit higher than 10.5% if the federal government is unable to provide $250M in funding for refugee claimants utilizing the city’s shelter system. Without that funding, Carroll says the City would be forced to impose a "federal impacts levy” of 6%, which would put the property tax increase at 16.5%.

City Council is set to vote on the final budget package on February 14.