Downtown tax crunch, High commercial taxes keep the squeeze on Canada's urban centres
TORONTO, Oct. 15, 2012 /CNW/ - Downtown Vancouver, Toronto and Montreal continue to share the dubious reputation for having Canada's highest commercial-to-residential tax ratios, all in excess of 4:1, according to a 2012 survey of property tax rates of major urban centres produced by the Altus Group for the Real Property Association of Canada (REALpac). But, as the report released today also found, the gap narrowed slightly for the fifth consecutive year, moving in a more favourable direction for the business environment in Vancouver and Toronto.
Montreal, on the other hand, is heading in the opposite direction. Its downtown commercial taxes, which are increasing at an alarming rate, will likely vault past Toronto's by next year and are rapidly approaching Vancouver's high levels.
"Even though the survey uncovered some improvement this year, with the exception of Montreal", said Paul Morse, CEO REALpac, "we remain deeply concerned about the damaging impact that inequitable commercial-residential taxes have on city growth and its ability to attract business and jobs."
"Our urban centres are vitally important and at the moment are expanding due to tenant demand and relatively low interest rates. High realty taxes are a barrier to business growth and in the long run, put a choke hold on investment in downtown office, hotel, apartment and retail property development", explained Morse.
According to Morse, REALpac has long contended that a commercial-to-residential ratio of about 2:1 would support healthy growth, and could be achieved through gradual reductions in the commercial rate.
"Jobs are at the core of a thriving city economy", added Morse. "With so many fundamental shifts taking place in our global economy, Canadian cities need to do what they can to accelerate business growth around where people want to live, not scare it away."
In other findings, the annual survey showed that even though Winnipeg and Edmonton raised their ratio slightly, they still maintained the lowest ranking among municipalities surveyed. Calgary and Ottawa made significant improvements to their ratios, while Halifax, falling closer to the average, published subtle reductions to its ratio as well.
On an absolute tax basis, Calgary, Vancouver, Edmonton and Winnipeg have the lowest estimated property taxes per $1,000 of commercial assessment, while Toronto, Ottawa, Montreal and Halifax have the highest. On the residential assessment side, Vancouver, Calgary, Edmonton and Toronto have the lowest property taxes per $1000 of residential assessment, while Winnipeg, Ottawa, Montreal and Halifax have the highest.
REALpac's website also points out that while most cities in Canada have moved to decrease commercial tax rates in the last 10 years, residential tax rates have declined at an even faster rate.
To download the "2012 Property Tax Rate Analysis", please click here.
About the Real Property Association of Canada
REALpac is Canada's premier industry association for investment real property leaders. Our mission is to collectively influence public policy, to educate government and the public, and to ensure stable and beneficial real estate capital and property markets in Canada.
REALpac members currently own in excess of $180 Billion CAD in real estate assets located in the major centres across Canada. Members include real estate investment trusts, publicly traded and large private companies, banks, brokerages, crown corporations, investment dealers, life companies, lenders, and pension funds. For more information, please visit us at www.realpac.ca.
About Altus Group Limited
Altus leads the global real estate industry in offering professional real estate advisory services, data solutions and intelligence about an organization's assets, generating a wealth of knowledge and insight. With a staff of over 1,700, Altus has a network of over 60 offices in 14 countries worldwide, including Canada, the United Kingdom, Australia, Asia and the United States. We operate five interrelated Business Units, bringing years of experience and a broad range of expertise together into one comprehensive platform: Research, Valuation and Advisory; Cost Consulting and Project Management; Realty Tax Consulting, Geomatics and ARGUS Software. Altusʹ clients include banks, financial institutions, governments, pension funds, asset and fund managers, developers and landlords and companies engaged in the oil and gas industry. Visit us at www.altusgroup.com.
SOURCE: Real Property Association of CanadaFor further information:
Paul Morse, CEO, 416-629-6587 or 416-642-2700 x237.