All levels of Canadian government pander to tenants for “easy” votes as reflected in the pro-tenant biases of Ontario’s Residential Tenancies Act (RTA). What few people realize is that many Ontario municipalities tax multi-residential rental properties anywhere from 50 per cent to 250 per cent as much as single-family homes or condominium units.
Property tax is a cost incurred by an apartment building owner, who adds it to their tenant’s rent. This practice further pushes the cost of rental housing out of reach of low-income families and fuels an already pandemic rental housing crisis in Ontario.
Typically, the property tax rate is determined by the municipality and is applied to the property value assessment determined by Municipal Property Assessment Corporation (MPAC).
Property tax = property value x applicable municipal tax rate(s) and education tax rate. For example, the property tax for a home that has been assessed at $300,000 = $300,000 x 1.100000% = $3,300.00.
Below is a list of Ontario municipalities’ property tax rates, ordered by worst offenders at the top:
Ontario Property Tax Rates (2015) |
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| Location | Residential | Multi-Residential | Difference | |
| Hamilton (Urban) | 1.383361 | 3.451109 | 2.07 | 149.5% |
| Orangeville | 1.410898 | 3.453851 | 2.04 | 144.8% |
| Toronto | 0.7056037 | 1.7265482 | 1.02 | 144.7% |
| Halton Hills (Urban) | 0.896794 | 1.782388 | 0.89 | 98.8% |
| Burlington (Urban) | 0.910620 | 1.803566 | 0.89 | 98.1% |
| Burlington (Rural) | 0.865139 | 1.710788 | 0.85 | 97.7% |
| Oakville | 0.849481 | 1.675371 | 0.83 | 97.2% |
| Burlington (Rural) | 0.859260 | 1.687395 | 0.83 | 96.4% |
| Milton (Urban) | 0.757464 | 1.467236 | 0.71 | 93.7% |
| Milton (Rural) | 0.727371 | 1.399170 | 0.67 | 92.4% |
| Oshawa | 1.572389 | 2.765896 | 1.19 | 75.9% |
| Brock | 1.410671 | 2.464050 | 1.05 | 74.7% |
| Clarington | 1.341171 | 2.334329 | 0.99 | 74.1% |
| Whitby | 1.303649 | 2.264293 | 0.96 | 73.7% |
| Ajax | 1.285391 | 2.230215 | 0.94 | 73.5% |
| Pickering | 1.280144 | 2.220423 | 0.94 | 73.5% |
| Scugog | 1.236323 | 2.138631 | 0.90 | 73.0% |
| Uxbridge | 1.178204 | 2.030151 | 0.85 | 72.3% |
| Mississauga | 0.888635 | 1.428825 | 0.54 | 60.8% |
| Brampton | 1.115127 | 1.763816 | 0.65 | 58.2% |
| Caledon | 0.896546 | 1.376615 | 0.48 | 53.5% |
| Orillia | 1.365073 | 2.075631 | 0.71 | 52.1% |
| Collingwood | 1.244804 | 1.810123 | 0.57 | 45.4% |
| Bradford | 1.119161 | 1.616821 | 0.50 | 44.5% |
| New Tecumseh | 1.040052 | 1.495112 | 0.46 | 43.8% |
| Aurora | 0.946098 | 0.946098 | 0.00 | 0.0% |
| Barrie (Urban) | 1.324051 | 1.324051 | 0.00 | 0.0% |
| East Gwillimbury | 0.9447664 | 0.9447664 | 0.00 | 0.0% |
| Georgina | 1.193835 | 1.193835 | 0.00 | 0.0% |
| King | 0.933277 | 0.933277 | 0.00 | 0.0% |
| Markham | 0.805732 | 0.805732 | 0.00 | 0.0% |
| Newmarket | 0.992400 | 0.992400 | 0.00 | 0.0% |
| Richmond Hill | 0.830899 | 0.830899 | 0.00 | 0.0% |
| Vaughan | 0.837242 | 0.837242 | 0.00 | 0.0% |
| Whitchurch/Stouffville | 0.879414 | 0.879414 | 0.00 | 0.0% |
Note that 150 per cent in the above table means 2 1/2 times higher and municipalities with a zero per cent difference are to be commended for recognizing the unfairness of the practice.
Since property taxes generally represent the largest annual expense (financing is not an “operational” expense), as an investor you should consider property tax rates of municipalities in which you’re considering buying (or building) a multi-unit rental property, not just for their unfair tax practices but also for the actual tax rate of multi-residential properties.
Reorganizing the table above depicts the top 10 municipalities that charge the highest property taxes for multi-residential properties.
| Location | Residential | Multi-Residential | Difference | |
| Orangeville | 1.410898 | 3.453851 | 2.04 | 144.8% |
| Hamilton (Urban) | 1.383361 | 3.451109 | 2.07 | 149.5% |
| Oshawa | 1.572389 | 2.765896 | 1.19 | 75.9% |
| Brock | 1.410671 | 2.464050 | 1.05 | 74.7% |
| Clarington | 1.341171 | 2.334329 | 0.99 | 74.1% |
| Whitby | 1.303649 | 2.264293 | 0.96 | 73.7% |
| Ajax | 1.285391 | 2.230215 | 0.94 | 73.5% |
| Pickering | 1.280144 | 2.220423 | 0.94 | 73.5% |
| Scugog | 1.236323 | 2.138631 | 0.90 | 73.0% |
| Orillia | 1.365073 | 2.075631 | 0.71 | 52.1% |
Based on the two lists above, you might want to think carefully about, and do more research on, Hamilton and Orangeville before investing in multi-residential property purchases and construction in these municipalities, which are the top two entries of both lists.
To be completely fair, however, you need to also compare absolute dollar values.
The Durham Region Association of Realtors report the average price of a single family home in Oshawa in June 2016 was $450,220, which would be taxed 1.383361 x $450,220 / 100 = $6,228. A 10-unit apartment building assessed at $1.3 million would be taxed 2.765896 x $1,300,000 / 100 = $35,957 or $3,596 per unit (family).
The question then is whether the municipality can justify that the overhead cost to service the 10 families in the apartment building is almost six times higher than servicing a single family home. I’ve not found a business case for this great disparity and it’s the rental housing (especially low-income) tenants who are paying the price.
Chris Seepe spent 35+ years in I.T. before entering commercial real estate a decade ago. He’s a published writer and author of two books on “landlording,” course instructor, president of the Landlords Association of Durham, and a commercial real estate broker of record at Aztech Realty in Toronto, specializing in income-generating and multi-residential investment properties. Call (416) 525-1558, or send him an email.
