Toronto Commercial Property Tax Rate: Components and Calculation

Toronto’s commercial property tax rate is a single percentage made up of three parts: a city rate set by council, a small city building fund levy, and a provincial education rate. For the 2024 tax year, general commercial properties paid a combined rate of 2.228677% on their assessed value.¹ The city portion resets each budget cycle, so the current year’s figure will differ; the City of Toronto publishes updated rates on its Property Tax Rates page once council finalizes the budget.²

The Three Components of the Rate

Three different authorities set the pieces that add up to your total. Knowing which piece moves in a given year helps you anticipate the bill.

The city tax rate is the largest component and the one council controls. In 2024 it was 1.339053% for general commercial properties.¹ It changes with the annual budget.

The city building fund levy is a small dedicated infrastructure surcharge added on top. It was 0.009624% for commercial properties in 2024 and grows incrementally each year.¹

The education rate is set by the Province of Ontario under Ontario Regulation 400/98 and collected by the city on the province’s behalf. For commercial properties it has held at 0.880000% for several years.³⁴

How to Calculate Your Bill

Multiply your property’s phased-in assessed value by the total rate.² Using the 2024 numbers, a general commercial property assessed at $1,000,000 would owe $22,286.77 for the year. Substitute the current year’s published rate for a live figure.

If you lease the property to a business, the tax number matters to both sides. Most commercial leases in Toronto use a triple net (NNN) structure, which passes property taxes, insurance, and maintenance through to the tenant on top of base rent. The lease should say how tax increases are allocated; where it doesn’t, the landlord can generally pass the full amount along. Running the calculation before signing avoids surprises on the first bill.

Which Commercial Category Applies to You

Not every commercial property pays the same rate. The province lets Toronto use several classes and optional subclasses, and office buildings, shopping centres, and parking lots can each fall under distinct classifications carrying different rates from the general commercial class.³ The city’s annual rates page lists the exact percentage for each classification.

Small Business Property Tax Subclass

Toronto adopted this subclass in 2021 to reduce the burden on smaller commercial properties. Starting in the 2026 tax year, council increased the municipal rate reduction from 15% to 20%, and the province confirmed a matching cut on the education portion.⁵ About 63% of commercial properties in Toronto qualify, covering roughly 28,000 businesses. The city identifies eligible properties automatically based on size and type; larger holdings and major shopping centres are excluded. You can check your status through the small business property tax page.⁶

Creative Co-Location Facilities Subclass

Properties housing clusters of arts and cultural tenants at below-market rents can apply for up to a 50% reduction on the eligible portion of the building.⁷ Requirements include:

Tenants paying at least 30% below average market net rent for comparable space in the neighbourhood.
At least 51% of tenants and 51% of net rentable area occupied by creative enterprises producing cultural goods or services.
Generally, at least 10,000 square feet of net rentable area with a minimum of five full-time creative enterprise tenants.
A lead tenant or operator with at least five years of presence in the property, past or committed.

Applications for the 2026 tax year were due by March 20, 2026.⁷

Where Your Assessed Value Comes From

The rate is only half the calculation. The Municipal Property Assessment Corporation (MPAC) assigns every Ontario property a Current Value Assessment, estimating what it would sell for on a specific valuation date.⁸

Here’s the wrinkle. MPAC’s cycles normally run four years, but Ontario postponed the reassessment scheduled for 2020 and has extended that postponement repeatedly. As of 2026, assessments still use the January 1, 2016 valuation date.⁹ Properties that have appreciated since 2016 are effectively taxed on a decade-old value; properties that have lost value are taxed on the higher old figure. You can view your assessment through MPAC’s AboutMyProperty portal.⁸

If You Think the Assessment or Bill Is Wrong

Two separate paths exist depending on what you’re disputing.

To challenge the assessed value, commercial owners can file directly with the Assessment Review Board (ARB) without going through MPAC’s Request for Reconsideration first, which is mandatory only for residential, farm, and managed forest properties. For the 2026 tax year, the filing deadline is March 31, 2026. The fee is $318 per roll number, with a $10 discount for electronic filing.¹⁰

Separately, you can apply to the city for cancellation, reduction, or refund of taxes when the property has changed during the tax year:¹¹

Fire or demolition that rendered the building substantially unusable, supported by a Fire Marshal report, insurance documentation, or a demolition permit with contractor dates.
A change in tax class, for example from commercial to residential.
Renovations that prevented normal use for at least three months.
Land becoming vacant, reclassified as excess land, or exempt.
A gross or manifest factual error in the assessment (not disagreement over valuation judgment).

Taxes must be paid in full while an application is pending. If the General Government Committee has not decided by September 30, you can escalate to the ARB by October 21. Refunds from successful applications are processed after resolution.¹¹

The provincial vacant unit rebate program for commercial and industrial properties has been discontinued. Municipalities were given authority to run local programs afterward, so check the current status with the city if vacancy affects you.¹²

Programs That Can Offset the Tax

Two targeted programs reduce commercial tax costs for specific property types.

The Heritage Property Tax Rebate matches a portion of eligible conservation work on commercial or industrial properties designated under the Ontario Heritage Act. To qualify, the owner must plan conservation work in a single tax year equal to at least 20% of the annual property taxes paid, and the property must be subject to a Heritage Easement Agreement (for individually designated properties) or a Maintenance and Conservation Agreement (for Heritage Conservation District properties). Outstanding municipal fines, tax arrears, or heritage contraventions disqualify a property.¹³

The Brownfield Remediation Tax Assistance (BRTA) program cancels all or part of the municipal tax increase from remediating and redeveloping a contaminated site, running up to two years, with the province potentially matching by cancelling education taxes for up to three more. Total benefit cannot exceed actual eligible remediation costs, which include Phase II and III environmental assessments, remediation work, environmental insurance premiums, and related demolition. The redeveloped property must generate employment; standalone warehouses, hotels, and non-ancillary retail don’t qualify. A Financial Incentives Agreement is registered on title.¹⁴

Billing Dates and What Happens If You Pay Late

Toronto issues two bills a year. Interim bills go out in January based on the previous year’s taxes; for 2026, interim installments are due March 2, April 1, and May 1.¹⁵ Final bills follow once the budget passes, with the first final installment due July 2, 2026.

The Pre-Authorized Tax Payment plan withdraws installments automatically on a schedule you pick: two, six, or eleven installments per year. Payment through the MyToronto Pay online portal or by mailed cheque are also available.¹⁶

Missing a deadline triggers a 1.25% penalty on the first day of default, with another 1.25% added on the first day of each subsequent month the balance stays unpaid. A full year of non-payment compounds to 15% in penalties on top of the tax owing. After two years of unpaid taxes, the city registers a Tax Arrears Certificate on the property title, and the owner has one year to pay the full cancellation price before the city can sell the property by public tender.¹⁷

1
City of Toronto. 2024 Property Tax Rates
2
City of Toronto. Property Tax Rates and Fees
3
Government of Ontario. Ontario Regulation 400/98 – Tax Matters – Rates for School Purposes
4
City of Toronto. 2025 Education Property Tax Levy and Clawback Rate By-Law
5
City of Toronto. City of Toronto Lowers Small Business Property Taxes Through 2026 Budget
6
City of Toronto. Small Business Property Tax Subclass
7
City of Toronto. 2026 Creative Co-Location Facilities Property Tax Subclass Designation Application
8
Municipal Property Assessment Corporation. Municipal Property Assessment Corporation
9
Municipal Property Assessment Corporation. Notices and Notifications
10
Tribunals Ontario. Filing an Appeal
11
City of Toronto. Property Tax Appeal – Cancellation, Reduction or Refund of Taxes
12
Municipal Property Assessment Corporation. Applying for a Vacancy Rebate
13
City of Toronto. Heritage Tax Rebate Program
14
City of Toronto. Brownfield Remediation Tax Assistance
15
City of Toronto. City of Toronto Issues 2026 Interim Property Tax Bills
16
City of Toronto. Property Tax Due Dates
17
City of Toronto. Late Tax Bill Payments