Toronto Tax Increases, Provincial Deadlines and Tax Relief Options

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Property owners in Toronto and across Ontario face a number of important developments in 2026 that may impact their tax obligations. This bulletin outlines the City of Toronto’s (the “City”) proposed tax rate adjustments, notes key deadlines for tax relief applications and provides guidance on managing Ontario’s property tax obligations in the coming year.

City of Toronto Proposed Property Tax Increases

Last week, the City approved its 2026 budget, which included a modest combined residential property tax increase and City Building Fund levy increase of 2.2%.

While not yet published, other property tax increases for 2026 include a 1.10% increase for Multi-Residential and Commercial properties and a 2.2% increase for Industrial properties. The New Multi-Residential subclass will continue to provide eligible properties a 15% reduction in municipal property taxes. The Small Business Tax subclass will also continue to provide eligible small businesses with a 15% reduction in the commercial tax rate.

The Municipal Property Assessment Corporation (“MPAC”) determines property tax classes and eligible properties. It should be noted that property assessment values will continue to be based on a January 1, 2016, current value for 2026 and should therefore be the same as the assessment values in 2025, subject to relevant changes such as renovations, improvements or demolitions.

City of Toronto Vacant Home Tax – Reminder to File Declaration

Owners of residential properties in Toronto have until April 30, 2026, to file a declaration regarding the 2025 occupancy status of their property. Owners must file this declaration, even if the property is their primary residence, tenanted or exempt (and no tax will be payable). Failing to do so will result in the property being deemed vacant, and a Notice of Assessment for Vacant Home Tax, set at 3% of the property’s current value assessment, will be issued.

The City has listed very limited exemptions from paying the Vacant Home Tax. If your property does not fall within the specific eligibility criteria, you may be denied the exemption. The City has the power to audit a declaration within three years of its filing. Therefore, as of 2026, the City can perform audits on Vacant Home Tax declarations made for 2023 and 2024.

For more information regarding the Vacant Home Tax, including a list of exemptions, visit the City’s Vacant Home Tax website.

Application for Adjustment of Taxes in 2025

Generally, the last day for filing applications for adjustments of taxes is February 28. However, given that February 28, 2026, falls on a Saturday, the deadline for filing applications for adjustment of taxes in 2025 is March 2, 2026. Applications must be submitted directly to the municipality in which a property is located.

Tax relief (cancellation, reduction or refund) may be available due to the following events having occurred during 2025:

• change in use to a tax class that attracts a lower tax rate;
• land becoming vacant land or excess land;
• land becoming exempt from taxation;
• building on the land being destroyed or damaged due to fire, demolition or otherwise;
• applicant is unable to pay taxes because of sickness or extreme poverty;
• mobile unit was removed;
• applicant was overcharged due to a gross or manifest error that is clerical or factual in nature (and not an error in judgment in assessing the property); and
• repairs or renovations prevented the normal use of the land for a period of at least three months during the year.

Charity Rebate Applications for 2025

A registered charity occupying Ontario property in the Commercial or Industrial tax classes can apply for a rebate of 40% of its 2025 realty taxes, provided it meets the eligibility requirements, by filing a rebate application by March 2, 2026.

Property Assessment Notices for 2026

Property Assessment Notices for the 2026 tax year were distributed in fall 2025. The continued postponement of the next provincial reassessment has meant that property assessment values have remained based on a January 1, 2016, current value for 10 years (even though reassessments were to take place every four years). This means that the assessment value shown for a property may not reflect current market values of a property owner’s view of their property. Many property owners remark how their assessment values are “so low” but, again, it’s important to remember these values reflect an assessment from 10 years ago.

To that end, it is essential that property owners ensure their property assessments are reviewed for the following reasons:

1. To ensure that no increases have occurred to the assessment values since 2017, unless the property has been subject to renovation, expansion or demolition;
2. While there may be grounds for MPAC to adjust its valuation of a property since 2017 and increase the assessed value, there are limitations on the extent of these changes and the arguments available to challenge such increases;
3. If the property has physically changed since 2017, which has detrimentally impacted the property’s value, then a reduction in the assessment value may be warranted; and
4. To the extent the property’s assessment value has never been reviewed, a successful appeal launched in 2026 can impact future tax years.

Note that the deadline to file a request for reconsideration or an appeal for 2026 is March 31, 2026.

The Municipal & Land Use Planning Group at Aird & Berlis LLP is available to review your property assessment notices and advise you with respect to appealing your assessment values for the 2026 tax year. For more information, please reach out to the author or a member of the group.