Sipping Coffee and Staring at My Toronto Tax Bill
I still remember the moment I opened that envelope from the City of Toronto back in early 2025. I was sitting at my kitchen table in East York with a lukewarm cup of coffee, staring out at the gray slush piled up on my driveway, when I tore open the official-looking letter. The number on the bill made me do a genuine double-take, and I actually choked a little on my coffee.
For years, I had heard people complain about property taxes rising, but it never really hit home until I saw my own numbers in black and white. I watched the digital readout tick up in a way that felt almost accusatory. It was like the city was reaching directly into my bank account and saying, “Thanks for living here.”
I decided right then and there that I was going to figure out exactly what was happening with my taxes. I spent three consecutive cold winter nights at my kitchen table with my dog sleeping on my feet, digging through dry PDF reports on the City of Toronto’s official website, scrolling through municipal budget slide decks, and watching archived City Council livestream debates on YouTube.
What I Discovered About Our Tax Bills
The more I dug into the numbers, the more I realized that most of us are operating in the dark when it comes to how our property taxes actually work. I found out that there is a lot more going on behind that single percentage increase number we hear on the news.
Here is what I uncovered: Toronto homeowners got hit with a historic 9.5 percent increase in 2024-the largest single-year hike since the city amalgamated back in 1998. Then, just when we thought the dust had settled, the city came back in 2025 and asked for another 6.9 percent. I also learned that property assessments in Ontario are still based on valuations from way back in 2016, which means my home’s tax assessment looks laughably low compared to what it could actually sell for on the market today.
The financial backdrop is actually pretty sobering when you look at it. Toronto inherited a structural deficit of over one billion dollars, the TTC was hemorrhaging money from pandemic-era ridership crashes, and costs for things like refugee shelter services kept climbing. It was enough to make any homeowner feel a little bit queasy.
Unpacking the 6.9% Sticker Shock on My Bill
When I first heard the “6.9 percent” figure on local radio last year, I honestly thought it meant a flat increase across the board. But when I actually sat down with my property tax bill and started reading the fine print, I discovered that the number is way more complicated than that. It is like the city took two different financial mechanisms, stitched them together, and called it one number.
I watched archived City Council meetings where Budget Chief Shelley Carroll and Mayor Olivia Chow debated the numbers. I listened to councillors like Brad Bradford argue that people were already stretched too thin, and James Pasternak raise concerns about the impact on local businesses. But in the end, the math seemed to win the argument.
The reality is that my 6.9 percent increase is not actually one thing-it is two things mashed together, and understanding the difference helped me make sense of my bill.
The Two Buckets: Base Tax vs. My Contribution to the City Building Fund
This is the part that really threw me for a loop when I figured it out. The City of Toronto splits your property tax increase into two completely separate buckets, and they each serve different purposes.
The first bucket is the Operating Budget, which is the base property tax that pays for all the daily services I actually use: the TTC transit system, police and fire departments, parks maintenance, snow clearing on my street, and the Toronto Public Library branch I visit every couple of weeks. For 2025, that base operating tax went up by 5.4 percent.
The second bucket is something called the City Building Fund, and this is where it gets interesting. This is a dedicated levy that was originally created during the John Tory era specifically to fund capital projects-things like building new transit lines or creating affordable housing. For 2025, that levy increased by 1.5 percent. The kicker is that the 1.5 percent is supposed to be automatic every single year unless City Council votes to stop it, which is extremely unlikely to happen.
So when you add those two numbers together-5.4 percent plus 1.5 percent-you get 6.9 percent. That is the number on my actual property tax bill.
| Component | Increase Percentage | What It Pays For |
|---|---|---|
| Operating Budget (Base Tax) | 5.4% | Daily services: TTC, police, fire, parks, snow clearing |
| City Building Fund Levy | 1.5% | Capital projects: Transit lines and affordable housing |
| Total Hike | 6.9% | The combined number on your bill |
For me as a taxpayer, it does not really matter which pocket the city is reaching into. All I know is that my bill went up by 6.9 percent, and that money is coming out of my monthly budget whether it is for buses or buildings.
Why Olivia Chow Pushed for This Squeeze
I kept asking myself: why would Mayor Olivia Chow propose something this aggressive when she knows it is going to make people angry? So I did what I always do-I watched some City Hall livestreams and tried to understand her perspective.
The answer, honestly, is that the city is broke. When Mayor Olivia took over, she inherited a financial mess that had been hidden under the rug for years with temporary budget fixes and borrowed money. The city had accumulated a shortfall of over one billion dollars, and it was not going away on its own.
The pandemic absolutely crushed TTC ridership, which meant huge declines in fare revenue. At the same time, costs for emergency services and refugee shelters skyrocketed. The city was spending hundreds of millions of dollars on shelter services that Mayor Olivia has argued should be funded by the federal government, not by local property taxpayers.
I watched her make the case at City Hall that the 5.4 percent base increase was the absolute minimum needed just to keep the lights on and prevent massive service cuts. Without that money, she argued, the city would have to close libraries, let the subway rot, and cut police and fire services. It was a sobering argument, even if it made my wallet hurt.
The Ghost of Taxes Past: The 2024 Historic 9.5% Hike
To really understand why everyone is so frustrated about paying 6.9 percent in 2025, I had to look back at what happened in 2024. That was the year that changed everything for Toronto homeowners.
The 2024 property tax increase was historic-9.5 percent, the largest single-year hike since the city amalgamated back in 1998. I remember reading about it in the news and thinking it was absolutely brutal. I actually felt a bit of a panic that year, wondering if this was going to become the new normal.
The reason for that massive jump goes back decades. For over ten years, property taxes in Toronto had been kept artificially low-often increasing at rates below inflation. Politicians loved to campaign on “keeping taxes low,” especially for condo owners, and it sounded great at the time. But the problem was that the city was not bringing in enough money through taxation to actually maintain all of its aging infrastructure.
So when 2024 rolled around, the city essentially decided it was time to stop playing games and start catching up. That 9.5 percent increase felt like getting hit with a decade worth of deferred costs all at once. It was painful, and people were angry.
Then 2025 came along, and the city came back for another 6.9 percent. I honestly felt like homeowners were being kicked while they were down, and I was not alone in that feeling. A lot of my neighbors were starting to seriously consider whether they could even afford to stay in Toronto anymore.
Peering Into 2026: What I Think Is Coming Next
Now we are sitting here at the end of 2025, and the conversation at City Hall is already shifting toward the next budget cycle. I know from watching previous years that the budget consultations will launch sometime in January 2026, and City Council will vote on the final budget sometime around mid-February 2026. By March, we will all know exactly what we are facing.
The big question everyone is asking is: Will the tax increases keep climbing at this pace? Are we going to see another 7 or 8 percent hike?
Will Our Bills Keep Climbing?
I wish I could give you a reassuring answer, but the truth is that property taxes in major cities almost never go down-they only go up or stay flat. The real question is how much they are going to go up.
From what I have gathered watching Budget Chief Shelley Carroll and listening to the political chatter, there is immense pressure to deliver something that looks more reasonable for 2026. After back-to-back hits of 9.5 percent and then 6.9 percent, people are genuinely angry and stressed about affordability.
I think the Budget Committee knows they cannot ask homeowners for another 7 or 8 percent hike without causing a real revolt. The political appetite for big increases has definitely cooled compared to the last two years. However, and this is important, that 1.5 percent City Building Levy is practically baked in automatically every year unless City Council specifically votes to stop it. I do not think that is going to happen.
So even if the base operating tax were somehow to freeze at zero percent-which would be a miracle-residents would still be starting from a baseline of 1.5 percent increase. My best guess is that the 2026 budget proposal will land somewhere in the 3 to 5 percent range total, which would be lower than the last two years but still nothing to celebrate.
The Billion-Dollar Gap and the Provincial Shuffle
The wildcard for 2026 is what the provincial and federal governments decide to do. Toronto still has that structural deficit hanging over its head, and it is not going away on its own.
The New Deal with Ontario helped the city get some additional provincial funding, but it did not solve the underlying problem. The city keeps arguing that the federal government should be funding emergency shelter programs, since these are really national issues, but the feds have not stepped up as much as the city hoped.
If the provincial or federal government does not provide additional cash to help close that billion-dollar gap, then the city has to find that money somewhere. And ultimately, that means it has to come from property taxpayers like me. This is the thing that frustrates me the most-I feel like we are just passing the buck between governments while homeowners get squeezed.
My prediction for 2026 is that we will see a proposal somewhere in the 4 to 5 percent range total increase, which would be lower than the last two years but still enough to sting. I would keep my eye on CBC News and the Toronto Star in January 2026, because that is when the first budget numbers usually leak out before the official announcements.
Not All Homes Are Billed Equal: Residential vs. Multi-Residential
One of the things I discovered during my research that completely surprised me was learning that not everyone pays the same property tax rate. I honestly did not know this before, but the city actually divides properties into different classes, and each class gets a different tax treatment.
If you own a single-family house or a condo, you fall under the Residential class and you pay the Residential rate. But if you own an apartment building, you fall under a completely different classification called Multi-Residential. And the tax rate you pay as a Multi-Residential property owner is actually quite different from what a homeowner pays.
The Multi-Residential Shift
In 2025, while homeowners like me faced that 6.9 percent combined hike, multi-residential properties were treated differently. The city has this policy where they try to keep the tax ratio for apartment buildings lower than for single-family homes. The idea behind it is that if you keep property taxes lower on apartment buildings, landlords are less likely to pass massive rent increases on to tenants.
For 2025, the base rate increase for multi-residential properties was capped at roughly half the residential rate-somewhere around 3.45 percent for the base portion. When you add in the levies, it works out to be lower overall than what a homeowner pays.
The city also created something called New Multi-Residential class specifically for buildings that are newly constructed and offering market-rent apartments. These new buildings get even better breaks on their property taxes, and the idea is to encourage developers to build more rental housing. This makes sense to me given that Toronto is in the middle of a pretty serious housing crisis.
Commercial and Industrial
Commercial properties-like the small retail stores along my local Danforth Avenue or the office buildings downtown-got capped at roughly 3.45 percent for the base increase, which is less than the residential rate but still significant when you think about a business owner’s bottom line.
Industrial properties, interestingly, ended up getting the same 6.9 percent increase as residential homeowners. I am not entirely sure why the city made that decision, but it is what happened.
Solving the MPAC Mystery: How I Calculated My Actual Bill
This is probably the most confusing part of the whole property tax system, and I spent a good chunk of my research time trying to understand it. When I looked at my property tax bill and then looked at what my house is actually worth on the real estate market, the numbers did not match up at all.
My house is worth roughly $1.2 million if I were to sell it today on the MLS market. But my property tax assessment showed a value of only about $750,000. I thought something was wrong, so I started digging.
It turns out that the Municipal Property Assessment Corporation (MPAC) is responsible for determining the assessed value of your property, and this is the value that gets multiplied by the tax rate to calculate your bill. But here is the crazy part: as of late 2025, most properties in Ontario are still assessed based on property values from way back in 2016, with adjustments phased in gradually over time.
This means that if your neighborhood has experienced huge real estate appreciation in the last nine years-like most of Toronto has-your assessed value is going to be significantly lower than your actual market value. It seems like a good deal for me as a homeowner, but it also means the city is missing out on potentially significant tax revenue.
The MPAC Calculation Formula
Once I understood the assessment value situation, I was able to work backwards and figure out roughly what my tax rate actually is. Here is the formula I used:
(MPAC Assessed Value) x (Total Tax Rate) = Your Annual Property Taxes
So for example, let me use round numbers. If my home is assessed by MPAC at $800,000, and the total residential tax rate including all levies is roughly 0.65 percent (this varies by ward and year), then my calculation would look like this:
$800,000 x 0.0065 = $5,200 in annual property taxes.
When the City of Toronto approved the 6.9 percent increase for 2025, what actually happened is that the tax rate went up by 6.9 percent. So the rate changed from whatever it was in 2024 to a new higher rate. My assessed value, assuming MPAC did not do a new assessment in my area, stayed the same. So my bill went up by 6.9 percent, roughly $360 per year in my example above.
The tricky part is that your assessed value can stay the same even though the tax rate goes up, but eventually MPAC will do a full reassessment in your area and then your assessed value will jump, which can cause another big increase in your bill on top of the rate increases. This has created a weird situation where some neighborhoods are paying taxes based on 2016 values while others have been reassessed more recently, which creates real inequities.
Where My Hard-Earned Dollars Actually End Up
After I understood how my bill was calculated, my next question was obvious: Where exactly is all this money going? What am I actually paying for when I write that check to the City of Toronto?
This is actually important to understand, because it helped me feel a little bit better about paying the increase. Not hugely better, but a little bit.
Police and emergency services consume a huge chunk of the operating budget. The Toronto Police Service alone takes up a significant portion of what we pay. Then there is fire services, paramedics, and all the emergency infrastructure that keeps the city safe.
The TTC is another massive line item in the budget. Every time I tap my PRESTO card on the 501 Queen streetcar or take the subway on Line 1, that service is funded at least partially by property taxes. The TTC has been losing money during the post-pandemic period as ridership has slowly recovered, so my taxes help keep the buses and subways running.
Then there is debt servicing, which is basically paying the interest on money the city borrowed in the past to build things or handle emergencies. It is not glamorous, but it is necessary.
That 1.5 percent City Building Levy I mentioned earlier goes directly into capital projects. During the John Tory era, it was earmarked for things like the Scarborough Subway Extension and various transit improvements. Increasingly, it is also going toward affordable housing initiatives and shelter services.
There is also money for parks, libraries-including the Toronto Reference Library branch I have visited-snow clearing (which explains why the city finally plowed my shared driveway in the middle of winter), garbage collection, and all sorts of other services that I honestly take for granted until they are not there.
Finding Relief: What I Learned About Senior and Disability Programs
During my research, I spent some time learning about the city’s property tax relief programs, and I was honestly surprised by how generous they are, even if not many people know about them. I was prompted to look into this after my elderly neighbor mentioned struggling with his increased property tax bill on his fixed pension.
If you are a low-income senior or a person with a disability, the City of Toronto has programs that can help you. The basic idea is pretty straightforward: if the increase portion of your property tax bill would create genuine financial hardship, the city can either cancel or defer that portion of the increase.
Let me explain how it works. Let us say your property tax bill went up by $400 in 2025 due to the 6.9 percent increase. If you qualify for the cancellation program, the city will essentially waive that $400 increase, and you pay the same amount as you did in 2024. That is real money in someone’s pocket.
There is also a deferral program, which works differently. If you choose the deferral option, you do not have to pay the increased portion of your taxes right now. Instead, the amount gets added to a running total against your home’s value. When you eventually sell your house, the deferred taxes plus accrued interest get paid out of the sale proceeds. It is not free money-it is basically a low-interest loan against your home’s equity-but it keeps you in your house without having to pay the increase immediately.
The eligibility requirements typically look at your household income and your age or disability status. You usually have to apply for these programs, and there are deadlines-often sometime in August or October each year. I learned that you can call 311 to ask questions about eligibility, or you can look up the information on the city’s official website.
What surprised me is that a lot of seniors are reluctant to apply because they feel embarrassed or they do not realize they qualify. I have been trying to encourage my neighbor to apply, because this is exactly what these programs are designed for-to help people who are genuinely struggling.
Max’s DIY Tip: How I Track My Property Details Online
One of the useful things I learned during my research is that you can actually look up your property assessment and other details online without having to call anyone or go anywhere. I have started doing this regularly, usually once a year, just to keep tabs on what MPAC thinks my house is worth.
You can go to the MPAC website and search for your property by address. The website will show you your current assessed value, the property classification, and some other basic information. It takes about five minutes, and I find it helpful just to know what is going on with my property from an assessment perspective.
I have also found the City of Toronto’s property tax portal helpful. You can log in with your address and see details about your current tax bill, including the breakdown between the base tax and the levy portions. I check this every January or so just to see what is coming.
My Personal Step-by-Step Property Tax Checklist
After spending all this time researching and understanding my own property taxes, I created a personal checklist to help me stay organized. I do not know if this will be useful for anyone else, but here is what I do to stay on top of things:
Step 1: Review Your MPAC Assessment – Every year in late December or early January, I log onto the MPAC website and check my assessed property value. I want to know if anything has changed. If I think the assessment is wildly off from market value, I can file a Request for Reconsideration.
Step 2: Open Your Property Tax Bill Carefully – When the bill arrives, I actually sit down and read it thoroughly instead of just writing a check. I look at the assessed value, the tax rate, and the total amount. I compare it to last year to make sure it makes sense.
Step 3: Calculate the Percentage Increase – I take the current year amount, subtract the previous year amount, divide by the previous year amount, and multiply by 100. It gives me the actual percentage increase in my bill, which I compare to the approved rate increase.
Step 4: Check for Relief Eligibility – If I qualify for any relief programs based on age or disability, I make sure I have applied before the deadline. I usually aim to apply by September at the latest.
Step 5: Plan for Budget Consultations – In January, I try to pay attention to when the city is holding budget consultations. If the proposed increase seems unreasonable to me, I make a point to attend a consultation or at least send an email to my local councillor expressing my concerns.
My Final Thoughts on the Toronto Tax Squeeze
I started this whole research project because I was frustrated and confused about my property tax bill. I wanted to understand what was happening and why my costs were going up so dramatically. I spent countless hours reading municipal reports and watching City Hall debates, and I learned a lot about how this city actually funds itself.
Here is what I have concluded: Toronto has real infrastructure needs, and property taxes are one of the main ways the city pays for those services. The back-to-back increases of 9.5 percent in 2024 and 6.9 percent in 2025 are painful, but they represent the city trying to catch up from years of underfunding and also dealing with new pressures like refugee shelter costs.
That does not mean I am happy about paying more-I am not. But at least now I understand where my money is going, and I appreciate the city’s efforts to try and balance the needs of homeowners, renters, businesses, and essential services. It is a tough balancing act, and I do not think Mayor Olivia Chow and Budget Chief Shelley Carroll have easy jobs.
What I would encourage my fellow Toronto residents to do is stay informed. Pay attention to the budget consultations launching in January 2026. If you think the proposed increase is unreasonable, show up or send a message to your councillor. Whether it is Brad Bradford, James Pasternak, or whoever represents your ward, they need to hear from constituents about their concerns.
I have learned that the squeaky wheel does get the grease in Toronto politics. If enough people voice concerns about property tax increases, the city will listen. The 2026 budget is already being discussed at City Hall, and your voice matters in that process.
In the meantime, I will keep paying my property taxes and keeping my eye on municipal finances. I expect the 2026 increase to be somewhat more moderate than the previous two years, but I do not expect to see any year where taxes go down. That is just the reality of living in a major city.
If you are frustrated about your property taxes, you are not alone. Most of my neighbors feel exactly the same way. But now that I understand the system better, I feel at least slightly less anxious about it. Knowledge is power, and understanding your property tax bill is the first step toward managing it effectively.