Toronto’s proposed property tax hike that would add hundreds of dollars to homeowners’ annual housing costs is raising concerns amongst experts, with some saying that a double-digit increase would only exacerbate the affordability crisis.

The city’s budget chief, Shelley Carroll, confirmed in a press conference on Wednesday morning that homeowners could see a 9% property tax increase for 2024. That would be in addition to a 1.5% increase for the city building levy, bringing the total increase to 10.5%. That figure is well above what it was in 2023 under former Mayor John Tory and would mark the most dramatic hike since Toronto was amalgamated around 25 years ago.

Managing Director of Ontario Property Tax Services for Colliers Canada, Robert Brazzell, points out that a 10.5% increase is also well above what other cities across Ontario will see for 2024. He says that fact alone is “cause for concern.”

“Considering some extreme circumstances including the pandemic, historically high levels of immigration, high interest rates, and persistent inflation, increases were anticipated. That said, [the increase] is still surprising,” Brazzell tells STOREYS.

At the root of the property tax conversation is Toronto’s massive operating shortfall, which City staff have indicated is in the ballpark of $1.8B.

Cost pressures associated with support and shelter services for refugee claimants have only deepened the shortfall, and although Mayor Olivia Chow managed to secure $400M in operating funding from the province at the end of last year, it won’t be enough to meaningfully satiate Toronto’s financial troubles.

In speaking to reporters on Wednesday, Carroll said that a property tax hike as high as 16.5% is still on the table, and could come to fruition when City Council votes on the final budget package on February 14 if the federal government is unable to provide an additional $250M in funding, which would be used towards refugee supports. Without that funding, which would need to be secured by January 26, Carroll says the City would be forced to impose an additional "federal impacts levy” of 6%.

Brazzell notes that “no tenable path forward” has been presented by the City to indicate that dramatic property tax increases will be avoided in the years to come, adding that the aforementioned city building levy of 1.5% is set to be in effect until 2035.

Bad News For First-Time Buyers and Renters

“The proposed increase would make Toronto a less affordable City more generally,” Brazzell says. “Toronto is already the only municipality in Ontario that requires home purchasers to pay a land transfer tax at the time of a home purchase. A 10.5% property tax increase for homeowners could put purchases for first-time home buyers even further out of reach.”

This could push existing and would-be homeowners out of Toronto and into markets where home values aren’t as high, so the amount owed for property taxes are less, says Kenan Yousef, a Realtor at

Yousef also points out that this isn’t an ownership-specific issue. Renters stand to become collateral damage if the City’s proposed hike is approved.

“If you're an investor, and all of a sudden your property taxes jump up by 10.5%, you're going to start pricing the tax bill into your rent when you're when you're re-leasing your place,” he says. “So I do see this having an impact not only on homeowners and investors, but on renters too.”

“Ugly ImpactsOn New Housing Supply

Though Yousef agrees that a property tax increase of some kind is “warranted,” he says that a hike as dramatic as what’s currently proposed is sure to implicate not only the finances of individual households, but the housing market on a larger scale.

“I think a hike of 10.5% is a bit too much. And it's too quick. I do think it could have some ugly impacts on the real estate market, and especially on new housing supply,” says Yousef.

“I work in pre-construction, and one thing we look for when investing in pre-construction is our carrying costs. So maintenance fees, property taxes — these are things that would impact you as an investor. If the numbers don't make sense relative to the amount that you're able to rent it out for, then investors will pass on it.”

As far as Brazzell is concerned, there’s a disconnect between raising property taxes so dramatically and preserving housing affordability. He also says these past few days have brought to light a deeper problem with how property tax increases are devised in Toronto — not to mention, how they are rolled out to the public with little “forward guidance.”

“Our property tax system is not transparent, and our system has significant inequities,” he says.

“Additionally, the postponement of reassessment by the provincial government has resulted in our property assessments being severely outdated. This affects the accuracy of assessments and compromises the equitable distribution of property taxes. This has been exacerbated by the reassessment delay which is a uniquely Ontario problem.”

Hike Amounts To Just A Dollar A Day, Says Budget Chief

In speaking to reporters this week, Carroll said the proposed hike, for many Toronto homeowners, would have them paying only an additional $30 per month, or a dollar a day. Even with that said, many residents are already deep in the throes of debt as cost of living soars, so the criticism is that even a dollar a day is still quite a big ask for some.

“I know that this year's property tax increase is much higher than people are used to,” Carroll wrote in an update published on Thursday evening. “As your Councillor and a homeowner who's supporting a family of my own, I would never accept this proposal from staff if I didn't deeply understand just how hard it was to get the number down to 9% to close the $1.8B gap. We can't keep kicking this can down the road.”

Carroll also pointed out that Toronto has habitually had some of the lowest property taxes in the Greater Toronto and Hamilton Area.

“While this year's percentage increase might be slightly higher than our Ontario neighbours, it brings our property taxes to middle of the pack of what other homeowners pay in real dollars,” she said. “Major cities across Canada are also coming forward with larger than usual property taxes this year. My hope as Budget Chief is that by facing this shortfall head-on this year, we can start to see it really come down and put our city back on track for the years ahead.”

Toronto’s Budget Committee is set to deliberate on the proposed tax hike, as well as other particulars of the 2024 budget, in the coming weeks. On February 1, Chow will deliver her budget — “the Mayor’s budget” — and City Council will vote on the final budget package on February 14.