Toronto Taxes 2026: City Fees, Rates and New Budget Hikes

Living in Toronto comes with a price tag that is unlike anywhere else in Canada. It is a city of immense opportunity, culture, and growth, but it is also a city that has developed a highly complex, multi-layered system of taxation to fund its operations. For residents, business owners, and investors, understanding the true cost of Toronto requires looking far beyond the single line item labeled “Property Tax” on your annual statement.

The story that has dominated the headlines for 2026 is out of City Hall: the municipal budget. Mayor Olivia Chow and the Budget Committee have recommended a 2.2 per cent property tax increase. On paper, at least, that is a political win for affordability, considering the historic 9.5 per cent increase that sent shockwaves through household budgets in 2024, and the 2.2 per cent property tax increase forecasted in 2026. But the headline number tells only a fraction of the story. The reality of the city’s revenue strategy lies in the details of user fees, consumption rates, transfer taxes, and targeted levies slated to go up – or change structure – in 2023.

This is an all-inclusive guide that is intended to be the one-stop source for tax information for the 2026 tax year. We analyzed the comprehensive tax code, provincial acts, as well as budget briefing notes, to make you aware of specific taxes that are applicable in the system with details on how these taxes are determined, along with details on how you can be affected by the changes that are to take place, including the new tax rates that come into effect on April 1st, 2026, for luxury taxes.

The 2026 Budget Context

The special fees can only be appreciated in context by understanding the financial philosophy driving this city in 2026. After the enormous budget shortfall of past years, it has taken on a strategy aimed at minimizing burden on the average residential homeowner while maximizing revenue from specific, high-wealth, or high-consumption sectors.

The recommendation for 2026 includes a 0.7 percent bump in the residential tax rate allocated to the city’s operating budget. That is exceedingly low by historical standards and below the rate of inflation. Paired with that, however, is a 1.5 percent boost to the City Building Fund. Together those equal the touted 2.2 percent total property tax rise.

Although this ensures that the typical household’s monthly cash flows remain unaffected with regard to their main taxes, the city has been working to ensure that it raises revenues through other channels. User fees for water and solid waste collections are set to rise by 3.75 percent, which is greater than the property tax increase. Additionally, the city has aggressively focused on ensuring that it raises funds through real estate and vacant properties to raise revenues required for the development of the housing and transit systems. The greater use of user fees and taxes on wealth is the defining trend of the Toronto tax environment of 2026.

Real Estate Transfer Taxes (The Transaction Costs)

For prospective buyers, the most significant financial hurdle in Toronto is the Land Transfer Tax system. Toronto remains the only municipality in Ontario with the legislative authority to levy its own land transfer tax in addition to the provincial tax. This is commonly referred to within the real estate industry as the double whammy.

1. Provincial Land Transfer Tax (PLTT)

Every property purchase in Ontario is subject to the Provincial Land Transfer Tax. This tax is payable by the purchaser upon registration of the transfer deed. The rates are calculated on a sliding scale based on the value of the consideration, which is usually the purchase price, and this information can be found using a property tax lookup.

For 2026, the provincial rates remain consistent with previous years. The calculation is progressive, meaning different portions of the property value are taxed at different percentages. The first $55,000 is taxed at 0.5 percent. The portion between $55,000 and $250,000 is taxed at 1.0 percent. The value between $250,000 and $400,000 attracts a 1.5 percent tax. Anything between $400,000 and $2,000,000 is taxed at 2.0 percent. Finally, for amounts exceeding $2,000,000, the rate is 2.5 percent.

While this tax goes to the provincial coffers at Queen’s Park, it is collected at the same time as the municipal tax, meaning the buyer must have the liquidity to cover both significantly large sums on closing day.

2. Municipal Land Transfer Tax (MLTT)

The Municipal Land Transfer Tax is the city’s largest source of revenue outside of property taxes. For the vast majority of buyers purchasing homes under $3 million, the MLTT mirrors the provincial rates exactly. This effectively doubles the tax burden for Toronto buyers compared to those in Markham, Mississauga, or Vaughan.

The standard rates for 2026 are as follows:

Value of Property	Tax Rate
First $55,000	0.5%
$55,000.01 – $250,000	1.0%
$250,000.01 – $400,000	1.5%
$400,000.01 – $2,000,000	2.0%
Over $2,000,000	2.5%

For a standard detached home in Toronto costing $1.5 million, a buyer will pay roughly $57,000 in total land transfer taxes. This upfront cost is a major factor in the city’s housing affordability discussion, as it requires buyers to save a substantial amount of cash beyond their down payment.

3. Luxury Property Land Transfer Tax

The most critical change for the 2026 tax year involves the treatment of high-value properties. City Council has approved new, steeper graduated rates for the Municipal Land Transfer Tax on expensive homes. These changes are scheduled to take effect on April 1, 2026.

This policy creates a distinct deadline for the luxury market. Transactions closing before April 1 will be subject to the old rates, while those closing on or after that date will face the new, higher levies. The city has implemented this to capture more revenue from the transfer of multi-million dollar assets, arguing that those who can afford such properties can afford to contribute more to city infrastructure.

The new rates apply specifically to the portion of the property’s value that falls within these high-value bands.

Value Range	New Tax Rate (Starts April 1, 2026)
$3,000,000 – $4,000,000	4.5%
$4,000,000 – $5,000,000	5.5%
$5,000,000 – $10,000,000	6.5%
$10,000,000 – $20,000,000	7.5%
Over $20,000,000	8.6%

To illustrate the impact, consider a property purchased for $5 million. Under the previous system, the portion over $2 million was taxed at a flat 2.5 percent (plus the recent luxury adjustments). Under the new 2026 structure, the bracket between $3 million and $4 million is taxed at 4.5 percent, and the bracket between $4 million and $5 million is taxed at 5.5 percent. This results in tens of thousands of dollars in additional tax liability for the buyer. The top rate of 8.6 percent for homes over $20 million is among the highest property transfer tax rates in North America.

Speculation and Vacancy Taxes

Toronto has taken an aggressive stance against the financialization of housing. The city administration holds the view that homes should be for people to live in, not speculative assets to park capital. Consequently, a series of taxes have been introduced to penalize non-resident buyers and owners who leave properties empty.

4. Vacant Home Tax (VHT)

The Vacant Home Tax is a specific municipal tool designed to increase housing supply by discouraging owners from leaving residential properties unoccupied. A property is considered vacant if it was not used as the principal residence of the owner or any permitted occupant (such as a tenant) for a total of six months or more during the previous calendar year.

For the 2026 tax year, the rate stands at 3 percent of the property’s Current Value Assessment (CVA). This is a significant increase from the initial 1 percent rate when the program was launched. For a condominium assessed at $800,000, a 3 percent tax amounts to $24,000 per year.

Homeowners are required to make a mandatory declaration of occupancy status annually. The deadline typically falls at the end of February. Failure to declare can result in the city deeming the property vacant by default, triggering the tax bill. While there are exemptions for situations such as the death of an owner, major renovations, or the owner being in hospital care, the burden of proof lies with the homeowner.

5. Municipal Non-Resident Speculation Tax (MNRST)

Effective January 1, 2025, the City of Toronto introduced its own speculation tax to run alongside the provincial version. This tax targets foreign nationals, foreign corporations, or taxable trustees who purchase residential property in the city. The Municipal Non-Resident Speculation Tax rate is 10 percent of the purchase price.

This tax applies to the transfer of land which contains at least one and not more than six single-family residences. It serves as a deterrent to foreign capital entering the local real estate market solely for investment purposes without the intent of establishing residency.

6. Provincial Non-Resident Speculation Tax (NRST)

While this is a provincial tax, it is inextricably linked to buying in Toronto. The Province of Ontario levies a 25 percent tax on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are not citizens or permanent residents of Canada.

When combined with the municipal tax, the total speculation tax burden becomes 35 percent of the purchase price. For a $1 million property, a foreign buyer must pay $350,000 in speculation taxes alone, before even calculating the land transfer taxes. This creates an extremely high barrier to entry for non-resident investors.

Recurring Property Taxes

Once you own a property, you face the annual property tax bill. This is the primary revenue stream for municipal services. The total tax rate is a blend of the city rate, the city building fund, and the education tax rate set by the province.

7. Residential Property Tax

This is the core tax paid by homeowners. For 2026, the proposed increase for the municipal portion is 0.7 percent. This revenue funds the daily operations of the city, including police, fire services, public transit, parks, libraries, and snow removal. The residential tax rate is the lowest of all property classes, reflecting a policy decision to shift the heavier tax burden onto commercial and multi-residential properties, although this gap is slowly narrowing.

8. Education Property Tax (Residential)

Every property owner contributes to the funding of the school system in Ontario. The Province sets this rate, and it is uniform across all municipalities. The City of Toronto collects this money on behalf of the province and remits it. For residential properties, the rate is 0.153 percent of the assessed value. This rate has historically decreased or remained flat as property values have risen to prevent windfalls in education funding.

9. Education Property Tax (Commercial)

Commercial properties face a significantly higher education tax rate than residential homes. The rate is set at 0.880 percent of the assessed value. This higher rate is a legacy of the tax system that viewed businesses as having a greater ability to pay. It is a major component of the “TMI” (Tax, Maintenance, Insurance) costs that commercial tenants must pay in their leases.

10. Multi-Residential Property Tax

This tax class applies to purpose-built rental apartment buildings (towers dedicated to rentals, not condos rented out by individuals). Historically, tenants in these buildings effectively paid a higher property tax rate than homeowners because the buildings were taxed at a much higher ratio. The city has been implementing a policy to reduce this ratio over time to promote fairness and housing affordability. The current ratio sits at approximately 1.9 times the residential rate.

11. Commercial Property Tax

Office towers, retail plazas, and main street storefronts fall under this category. The tax rate for commercial properties is roughly 2.5 times higher than the residential rate for a property of the same value. This disparity is often cited by business groups as a competitive disadvantage for Toronto businesses compared to those in the surrounding “905” regions where the ratios may be different.

12. Industrial Property Tax

Warehouses, factories, and logistics centers are taxed under the industrial class. Similar to commercial properties, the ratio is approximately 2.5 times the residential rate.

13. Small Business Property Tax Subclass

To assist smaller independent businesses, the city introduced a subclass that provides a 15 percent reduction in the municipal tax rate for eligible commercial properties. This applies to properties that are assessed below a certain value threshold and are not located in major office towers or shopping malls. It is designed to help local main street shops survive in a high-cost environment.

14. New Multi-Residential Property Tax Subclass

In an effort to stimulate the construction of new rental housing, the city offers a 15 percent tax reduction for new multi-residential developments. This incentive applies for 35 years. It is a critical tool in making the economics of building rental apartments viable for developers who might otherwise choose to build condominiums.

15. New Multi-Residential Reduction Subclass (Enhanced)

Building on the previous item, recent policy updates have strengthened this incentive. For certain projects that meet specific criteria regarding affordability or location, the tax reduction can be deeper or the terms more favorable. This reflects the city’s urgent need to increase the supply of rental housing to address the vacancy rate crisis.

16. Heritage Property Tax Reduction

Owners of designated heritage properties can apply for a tax rebate. If the owner enters into a Heritage Easement Agreement with the city, committing to maintain and preserve the heritage attributes of the building, they can receive a refund of up to 40 percent of the municipal and education taxes. This program recognizes the additional costs associated with maintaining historic structures.

17. Property Tax Appeal Relief Program

While not a tax itself, this is a crucial mechanism for relief. Property owners who believe their property assessment is too high can appeal to the Assessment Review Board. If successful, this results in a reduction of the assessed value and a retroactive refund of taxes paid. Additionally, relief is available for properties that have undergone significant changes during the year, such as demolition or fire damage, which would lower their value.

18. Rent Reduction Following Property Tax Reduction

Toronto has a unique bylaw that protects tenants in multi-residential buildings. If the property taxes on a rental building decrease by more than 2.49 percent from one year to the next, the landlord is required to pass those savings on to the tenants in the form of a rent reduction. This happens automatically, and the city sends notices to tenants informing them of the reduction amount.

Utilities and Essential Services

Unlike some municipalities where services like garbage collection are funded entirely through property taxes, Toronto relies heavily on user fees. This “pay-as-you-throw” and “pay-for-what-you-use” model is intended to encourage conservation and waste diversion.

19. Water and Sewer Rates

The 2026 budget proposes an interim increase of 3.75 percent for water and wastewater consumption. Toronto utilizes a two-block rate structure to assist large industrial users while maintaining a base rate for residents.

The Block 1 rate applies to the first 5,000 cubic meters of water used annually. This covers almost all residential households. The rate is approximately $4.8629 per cubic meter.

The Block 2 rate applies to consumption exceeding 5,000 cubic meters per year and is set at approximately $3.3219 per cubic meter. This lower rate is designed to keep large-scale manufacturing and industrial processes economically viable within the city limits.

In addition to the consumption rates, there are flat administrative fees for services such as setting up a new account ($90.74) or providing a water status certificate ($69.50) during a property sale.

20. Solid Waste Management Fee

Toronto residents are billed separately for garbage collection based on the size of the bin they choose. This fee is not included in the property tax bill. The fees are set to increase by 3.75 percent in 2026. This system incentivizes homeowners to recycle and compost more, as smaller garbage bins cost significantly less.

The estimated annual fees for 2026 are as follows:

Bin Size	Annual Fee (2026 Estimate)	Quarterly Cost
Small	~$306	~$77
Medium	~$375	~$94
Large	~$505	~$127
Extra Large	~$585	~$146

This fee covers the collection of garbage, recycling (Blue Bin), organics (Green Bin), yard waste, and bulky items, contributing to the overall budget managed by the budget chief. It also funds the city’s diversion programs and the management of the Green Lane Landfill.

21. Electricity Delivery Charge (Toronto Hydro)

While electricity rates are regulated provincially, the delivery component of the bill is collected by Toronto Hydro, a corporation solely owned by the City of Toronto. The delivery charge covers the cost of building and maintaining the local grid. It consists of a fixed monthly service charge (roughly $35 to $45) and a variable charge based on the amount of electricity consumed.

22. Electricity Submetering Fees

Many newer condominiums in Toronto do not have their units directly metered by Toronto Hydro. Instead, they use third-party submetering companies. These companies charge administrative fees for reading the meters and issuing bills. These fees are unregulated and can often be higher than the basic service charge levied by Toronto Hydro, adding an extra layer of cost for condo dwellers.

Business Taxes, Levies, and Licenses

Operating a business in Toronto involves navigating a complex web of licenses, permits, and area-specific levies.

23. Business Improvement Area (BIA) Tax Levy

Toronto has a vibrant network of Business Improvement Areas (BIAs). These are specific geographic zones where businesses have joined together to fund local improvements such as streetscaping, festivals, holiday decorations, and graffiti removal.

The cost of these improvements is funded through a special BIA levy added to the commercial property tax bill of every property within the zone. The rate varies significantly depending on the budget of the specific BIA. A business in the wealthy Bloor-Yorkville BIA will pay a substantial levy, while a business in a smaller neighborhood BIA will pay much less. The levy is calculated by taking the total budget required by the BIA and dividing it by the total assessed value of all commercial properties in the area.

24. Municipal Business License Fee

Certain types of businesses require a municipal license to operate legally. This includes restaurants, driving instructors, hair salons, and contracting services. The fees for these licenses cover the cost of inspections and enforcement. The annual cost ranges from approximately $300 to over $600 depending on the complexity and risk level of the business.

25. Food Truck License

Toronto has a reputation for having strict and expensive regulations for mobile food vendors. A food truck operator must pay for a mobile food vending license. The initial application fee and the annual license fee combined can exceed $1,400. This high cost of entry is often cited as a reason why the food truck scene in Toronto is not as large as in other major North American cities.

26. Food Cart License

Sidewalk food carts, typically selling hot dogs or sausages, also require specific licensing. While slightly less expensive than a full food truck license, the fees are still significant. Furthermore, there is a moratorium on new permits in certain congested areas of the downtown core, making existing permits valuable commodities.

27. Street Vending License (Hawker/Pedlar on Foot)

Individuals selling goods on the sidewalk or moving from place to place without a motorized vehicle must obtain a Hawker/Pedlar license. The annual fee for this license is approximately $758. This includes vendors selling flowers, merchandise, or crafts.

28. Sign Permit Fee

Businesses that wish to erect signs on their buildings must obtain a permit. The city charges fees based on the type and size of the sign. A simple wall sign fee is calculated per square meter, with a minimum fee often exceeding $300. More complex signs, such as roof signs or electronic static copy signs, attract higher fees and rigorous review processes to ensure they comply with the sign bylaw.

Development and Planning Costs

The cost of growth is paid for by growth. This is the principle behind the heavy taxes and fees levied on the development industry in Toronto. Ultimately, these costs are passed down to the final purchaser of the new home or condo unit.

29. Development Charges (DC)

Development charges are fees collected from developers at the time a building permit is issued. These funds are used to pay for the capital costs of infrastructure required to support new residents, such as new roads, water mains, sewers, community centers, and police stations.

For 2026, the city has made adjustments to the indexing of these charges. While they typically increase with inflation, the city has paused indexing for the 2025-2026 period in an attempt to lower the cost of construction and spur housing starts. Despite this pause, the charges remain substantial, often exceeding $100,000 for a single detached home and over $50,000 for a large condominium unit.

30. Community Benefits Charge (CBC)

This charge replaced the old Section 37 density bonusing framework. The Community Benefits Charge applies to high-density residential developments that are five storeys or higher and contain 10 or more units. The rate is capped at 4 percent of the value of the land on the day before the building permit is issued.

For a downtown development site worth $50 million, the developer must pay a $2 million charge to the city. These funds are restricted and can only be used for specific community benefits like affordable housing, parks, and cultural facilities.

31. Planning Application Fees

The administrative cost of processing development applications in Toronto is fully recovered through user fees. These fees are among the highest in the country. An application for an Official Plan Amendment costs over $232,000. A Zoning Bylaw Amendment application fee starts at over $63,000. A Site Plan Control application fee starts at over $43,000. These fees must be paid upfront by the developer before the city staff will even begin to review the proposal.

32. Building Permit and Inspection Fees

Once planning approval is granted, a building permit is required to commence construction. The fees are calculated based on the floor area of the proposed work and the type of building. These fees cover the cost of reviewing the technical drawings for compliance with the Building Code and conducting site inspections during construction.

33. Local Improvement Charges

Sometimes, a specific neighborhood requires or requests an infrastructure upgrade that goes beyond the standard level of service, such as decorative street lighting, noise barriers, or back-laneway paving. The city can undertake this work and charge the cost back to the specific properties that benefit from it. These charges appear as a separate line item on the property tax bill for a set number of years until the capital cost is repaid.

34. Condo Common Element Surcharge

While not a tax levied by City Hall, this is a mandatory cost structure created by provincial legislation and enforced through municipal reserve fund requirements. Every condo owner pays a monthly maintenance fee. A portion of this fee is legally required to be set aside in a Reserve Fund to pay for major capital repairs like roof replacement or window retrofits. The City of Toronto’s rigorous standards for these studies often necessitate higher contributions, effectively acting as a forced savings tax on condo ownership.

Lifestyle, Mobility, and Fines

The city regulates behavior and manages public space through a variety of permits and fines.

35. Municipal Accommodation Tax (MAT)

Tourists and visitors contribute to the city’s finances through the MAT. This tax applies to short-term accommodations, including hotels, motels, and short-term rentals like Airbnb. The current standard rate is 6 percent of the room revenue. However, for a temporary period extending through mid-2026 (largely to fund World Cup hosting costs), the rate has been increased to 8.5 percent. This tax is added to the guest’s bill at checkout.

36. Residential On-Street Parking Permit

In many of Toronto’s older neighborhoods, homes do not have private driveways. Residents must park on the street. To do so legally overnight, they must purchase a permit. The cost varies based on availability and priority. For a first vehicle with no driveway access, the fee is approximately $23.08 per month plus HST. If a household has a driveway but chooses to park a second car on the street, the fee jumps significantly to approximately $67.02 per month, reflecting the city’s desire to prioritize street space for those who truly need it.

37. Temporary On-Street Parking Permit

For guests or temporary situations, residents can buy short-term passes. A 24-hour pass costs roughly $20.74. A 48-hour pass is approximately $29.97. A weekly pass costs around $44.94. These fees are adjusted annually for inflation, reflecting the ongoing adjustments in the toronto property tax system.

38. Bike Share Toronto Membership Fee

The Bike Share system is owned by the Toronto Parking Authority, a municipal agency. While it functions as a service, the user fees are a form of city revenue. An annual membership costs between $105 and $120 depending on the plan (30-minute vs. 45-minute rides). Non-members pay unlock fees and per-minute usage charges.

39. Pet Licensing Fee

All dogs and cats in Toronto must be licensed. The revenue from these fees directly funds the Toronto Animal Services shelters and emergency response teams. The fee structure incentivizes sterilization. A license for a spayed or neutered dog is approximately $25 per year, while an unaltered dog costs $60. For cats, the fees are roughly $15 and $50 respectively. Senior citizens are eligible for a 50 percent discount on these fees.

40. Tree Removal Permit Fee

Toronto’s urban canopy is protected by strict bylaws. A homeowner cannot simply cut down a tree on their private property if the tree’s diameter exceeds 30 cm at chest height. They must apply for a permit. The application fee is $137.50 for a private tree. However, this is just the administrative cost. The city often requires the homeowner to pay for a replacement tree or pay cash-in-lieu if replanting is not possible. The cash-in-lieu value is set at $585 per tree.

41. Graffiti Removal Fee and Lien

Property owners are responsible for keeping their buildings free of graffiti. If a building is tagged and the owner fails to clean it after receiving a Notice of Violation, the city will send a crew to clean it. The cost of this cleaning, plus administrative fees, is then billed to the owner. If unpaid, this debt is added to the property tax roll with priority lien status, meaning it has the same power of enforcement as unpaid property taxes.

42. Late Tax Bill Payment Fine

Cash flow management is critical for taxpayers because the city charges punitive interest on late payments. The penalty is 1.25 percent of the outstanding balance added on the first day of each month that the tax remains unpaid. This compounds to an effective annual interest rate of over 16 percent. This fee acts as a strong deterrent against delinquency and ensures the city maintains its cash flow.

Conclusion

The 2026 tax landscape in Toronto is defined by a distinct shift in strategy. The headline 2.2 percent property tax increase is a political victory for the Mayor, offering relief to existing homeowners weary of the double-digit hikes of the past. However, the true cost of the city has not decreased; it has simply shifted.

The burden is increasingly being placed on three specific groups: those purchasing luxury real estate (through the April 1st MLTT hikes), those leaving homes vacant (through the 3% VHT), and those creating new housing (through development charges and the CBC). For the average resident, the costs are rising incrementally through user fees for water, garbage, and parking.

Understanding these separate taxes and fees provides a clear picture of the Total Cost of Ownership in Toronto. It highlights that while the barrier to keeping a home (annual property tax) is relatively moderate compared to other cities, the cost to enter the market (land transfer tax) and the cost to develop the market (construction taxes) are among the highest in North America. Whether you are budgeting for a new home purchase, planning a renovation, or simply trying to manage your monthly household expenses, this list serves as your essential financial roadmap for the year ahead.

The Total Cost

So, when you hear “2.2% tax increase,” take it with a grain of salt.

Yes, the base rate is only rising by 2.2%. That’s good news for existing homeowners in 2026. But if you are:

• Buying a luxury home: You are getting hammered by the new April 2026 MLTT rates.

• A Foreign Buyer: You are paying 35% in speculation taxes.

• Leaving a home empty: You are paying 3% a year.

• Renovating: You are paying massive permit fees.

• Just living: You are paying 3.75% more for water and garbage.

Toronto is an amazing city, but it is a “pay-to-play” environment. Knowing these fees won’t make them go away, but at least you won’t be surprised when the bill arrives.

Disclaimer: Tax rates and budget proposals are subject to final Council approval and provincial legislation. Always consult a tax professional or real estate lawyer before making big financial decisions.