To effectively reduce its residential property tax rate, Brampton must diversify its tax base
It’s budget time for most municipalities in Ontario. Unlike cities elsewhere in the world — where municipalities can levy income, sales, and payroll taxes — places like Toronto, Ottawa, and Brampton rely on property taxes for most of their operating revenue, and they are complicated.
Toronto homeowners enjoy the cheapest property tax rates in the Greater Toronto Area, too low in fact to properly support city services like transit, housing, or adequate snow clearance.
Meanwhile, Brampton has some of the highest property tax rates in the city. A typical house in Brampton whose assessed value is $800,000 would be levied $8,284.73 in property taxes in Brampton. A similar house in suburban Scarborough or Etobicoke might be worth more, but the taxes on a house accessed at $1 million would be just $6,355.10.
While freezing property taxes might be popular, it isn’t a sustainable solution to high property taxes. A property tax freeze means that the city will not collect any additional tax revenue, regardless of new development or higher property assessments; unlike income and sales taxes, property tax revenue does not grow with the economy. Commercial and industrial property tax rates are higher, but Brampton doesn’t have enough of either land use compared to housing.
Brampton’s property tax issues are structural; tax cuts or freezes will not help. Having a diverse tax base, like Toronto’s, is a better solution, but it won’t be easy. I explain more in Bramptonist.