'No one can afford' 100% property tax increase, Yonge Street business owner says
Small business association plans to fight 100% property tax hikes
Flipping through a stack of property tax bills from businesses around his neighbourhood, John Anderson says he's worried about the future of Yonge Street as some of them face a 100 per cent tax hike.
Anderson owns Morningstar Trading, a furniture store between Isabella Street and Gloucester Street. He says he used to pay $5,600 a month for taxes, maintenance and insurance as a tenant in the building, but that's expected to go up to as much as $9,000 a month.
"I can't afford that," he said. "No one can afford that."
"What will happen up and down Yonge Street is you will see a lot of businesses closing."
The Yonge Street Small Business Association, which includes properties between Charles Street and Grosvenor Street, met Wednesday night to voice their concerns about the tax increase.
"You're going to gut out and you're going to destroy half of the main street in the city of Toronto," Anderson said.
Paul Burford, who owns the House Of Lords hair salon, a fixture on Yonge Street for decades, posted his tax bill on Facebook Tuesday, saying the increase is forcing him to close his shop in October.
Sanjoy Kundu, the owner of costume shop Theatrics Plus, is also thinking about calling it quits after nearly 50 years on the block.
"They've assessed my building at a rate that I can't believe," Kundu told CBC Toronto.
He said he paid $20,000 in property taxes last year. This year, he estimates it will be close to $40,000.
"What we've been hearing is a very legitimate concern about the increase in property taxes," said Tristan Downe-Dewdney, a planning adviser to Coun. Kristyn Wong-Tam, who represents Ward 27, Toronto Centre-Rosedale.
"There's a number of business owners up and down Yonge Street that have seen increases in the order of 100 per cent or more, and that obviously has major consequences for what Yonge Street looks like," he said.
"What [the increase] really says is that the only viable use of the land here is for development. And that really is what's at the root of the problem."
Taxation the problem, some say
In Toronto, the property tax for a commercial space is determined by the building's current assessed value and then multiplied by about 2.5 per cent.
When nearby homes are selling for tens of thousands of dollars over asking, prices for all types of properties in the area go up. So when the Municipal Property Assessment Corporation (MPAC), the not-for-profit corporation that assesses and classifies all properties in Ontario, comes around to rate a property, it bases its value on what buildings sold in the area and for what price.
"We have two and three-story commercial buildings that are getting assessed at the same rates as large condominium buildings," Downe-Dewdney said.
"We have a system that reacts to development but ends up actually promoting it, which I don't think is anybody's intention."
Still, despite the effect these developments have on taxes, Anderson said business owners on Yonge Street are aware of the positive side of things.
"My customers are in these condo buildings," he said. "I have no problem, and most of our merchants have no problem, with condos. But we've got to survive as it's being built. The taxation system is broken."
Wong-Tam's office is expected to meet with MPAC and the city's revenue department about the issue in the coming weeks.
With files from Nick Boisvert