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Toronto broker weighs in on property tax hike

Cities across Canada are grappling with financial setbacks, leading to a surge in property taxes aimed at recovering losses. In Toronto, facing a daunting $1.8-billion budget shortfall, property taxes are slated to rise by 10.5 percent this year. Mayor Olivia Chow has issued a cautionary note, suggesting this figure might escalate to 16.5 percent if additional funding from Ottawa is not secured to support refugee claimants in the city.

Toronto real estate broker John Pasalis shared insights with financial news outlet BNN Bloomberg, emphasizing that property taxes represent one of the viable options for City Hall to address budgetary gaps. Pasalis, who is the president and broker of Realosophy Realty, acknowledged the necessity of such measures, noting a lack of overwhelming opposition among homeowners.

Commenting on Mayor Olivia Chow's actions, Pasalis stated, "(Toronto Mayor Olivia Chow) has to do whatever she can to increase the budget, and certainly increasing property taxes is the measure that they're taking."

Despite the seemingly substantial 10.5 percent increase, Pasalis reassured that the average Toronto homeowner would only witness a modest uptick of around $30 in their monthly bill. He highlighted that, although nobody enjoys paying more taxes, homeowners have been relatively supportive, recognizing the city's challenges. Pasalis added, "I think they're seeing the challenges that the city's facing, and at the end of the day, property taxes are quite low in the City of Toronto."

The situation in Toronto mirrors a broader trend across Canada, with other cities also witnessing spikes in property taxes. In London, Ontario, taxes are expected to rise by as much as 13 percent, while Calgary, Vancouver, and Saskatoon are confronting substantial hikes.

This surge in property taxes aligns with the ongoing increase in the cost of homeownership in Canada. The Canadian Real Estate Association reported a notable rise in home sales and prices in December, marking the most significant year-over-year climb since August. However, Pasalis cautioned against viewing the December figures as indicative of what 2024 might hold.

"I don't think anyone in the industry's expecting us to return to a bull market. It's probably going to be a little bit busier than 2023, but certainly I think (economic) pressures could be impacting demand," Pasalis stated, reflecting on the broader outlook for the housing market.

As cities grapple with financial constraints and seek avenues for revenue generation, property taxes emerge as a pragmatic solution, albeit one that invites contemplation and consideration from both policymakers and the communities they serve. The debate around striking the right balance between fiscal responsibility and the economic well-being of residents is likely to continue as municipalities navigate these challenging times.



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