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Business tax calculation

The Current Value Assessment (CVA) of your business property is the estimated value which is determined by the Municipal Property Assessment Corporation (MPAC).

If the assessment value for your business property increases from the previous valuation, this increase is phased-in equally over the next four years. For example, if your property value increases by a total of $100, then the CVA will increase $25 each year in 2018, 2019, 2020, and 2021.

 

Tax capping

To protect commercial, industrial and multi-residential properties from significant tax increases, the Province of Ontario has set a limit or “cap” on the per cent business property taxes can increase if the property value increases.

This limit is only available to properties with taxes capped in the previous year.

If your business property is capped, your bill will have an “Explanation of Multi-Residential, Commercial and Industrial Property Tax Calculations” section that explains the capping calculation and any tax increases for your property.

 

How the tax cap is calculated

For each eligible property the cap is calculated based on the greater of:

  • 10% of the previous year’s annual capped taxes
  • 10% of the previous year’s annual taxes based on Current Value Assessment (CVA)

If the calculated taxes are within $500 of CVA taxes after the cap is applied, the property will pay taxes based on the CVA.

 

Tax claw back

The amount of taxes capped is funded through a “claw back” of assessment related tax decreases. The City will withhold a percentage of tax reductions to fund the shortfall in taxes for the properties being capped.

The claw back is only applied to properties with tax decreases withheld in the previous year.

 

Claw back rates

The 2018 claw back rates are:

 

Type Rate
Commercial 16.30502%
Industrial 12.99790%
Multi-residential 3.70367%

 

If the property is within $500 of CVA taxes after the claw back is applied, the property will pay taxes based on the CVA and receive the full amount of their assessment related decrease.

 

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