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Property Report Montreal commercial property owners bear highest tax burden

Montreal has the highest commercial-to-residential property tax ratio in the country, rising from 4.29 to 4.40 last year.

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Montreal has for the first time topped Vancouver and Toronto as the city with the highest commercial-to-residential property tax ratio in the country.

The ratio, which gauges how much of the local tax burden is falling to owners of office buildings, retail space and industrial complexes as opposed to homeowners, is closely watched by the commercial real estate industry. The industry has long been arguing in favour of a commercial-to-residential ratio of about 2 to 1.

The industry's biggest beef historically has been with Toronto, but the ratio in Canada's most populous city has been steadily creeping downward for about a decade now.

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Montreal, meanwhile, has had a sharp increase in the ratio – one that's drawing the ire of the commercial real estate industry.

"High realty taxes are a barrier to business growth and deter investment in downtown office, hotel, apartment and retail property development," says Carolyn Lane, a vice-president at the Real Property Association of Canada (REALpac).

Altus Group has just crunched the latest tax numbers for REALpac, and they show that Toronto's ratio nudged down over the last year to 4.07 from 4.13. Montreal's, meanwhile, rose to 4.40 from 4.29. Vancouver's ratio rose over the same period to 4.35 from 4.32, because of reductions in its residential taxes.

"Montreal continued to trend upwards at an alarming rate that has seen them leapfrog past Toronto and Vancouver over the last two years," says an Altus Group report.

Calgary, Edmonton, Winnipeg, Ottawa and Halifax all have ratios below 3 to 1.

When it comes to the absolute amount of commercial taxes charged, Calgary, Vancouver, Edmonton and Winnipeg have the lowest property taxes per $1,000 of commercial assessment while Toronto, Ottawa, Montreal and Halifax have the highest. Estimated commercial property taxes per $1,000 of assessment are $14.30 in Calgary, $16.49 in Vancouver, $18.25 in Edmonton, $28 in Winnipeg, $30.36 in Toronto, $31.52 in Ottawa, $35.83 in Halifax, and $38.26 in Montreal.

For residential taxes, Vancouver, Calgary, Edmonton and Toronto have the lowest property taxes per $1,000 of residential assessment, while Winnipeg, Ottawa, Montreal and Halifax have the highest. Estimated residential taxes per $1,000 of assessment are $3.79 in Vancouver, $6.32 in Calgary, $7.46 in Toronto, $7.82 in Edmonton, $8.69 in Montreal, $11.73 in Ottawa, $12.19 in Halifax, and $14.10 in Winnipeg.

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