Good News for Toronto Small Business Property Tax
In 2026, the City of TorontoSmall business commercial property tax relief increased from 15% to 20%. Combined with Ontario's automatic matching on education tax, the actual savings are substantial—up to $5,000 per household per year.
Mayor Olivia Chow said after the budget passed: 'Small businesses are the backbone of the economy, and this increase to 20% is a real reduction in burden.' The city council passed it unanimously, covering approximately...28,000 small businesses— Accounts for 63% of Toronto's commercial properties.
💡 Key Numbers
- Reduction Ratio:15% → 20% (up 5 percentage points)
- Coverage Scope:28,000 Businesses, 63% Commercial Properties
- Annual Savings:Up to $5,000 per household
- Effective:2026 tax year (already reflected on your tax return)
- Ontario Education Tax:Automatically match 20% reduction
- Policy Cap:The province allows up to 35% (Toronto is currently at 20%, with room to increase).
Which properties qualify? Three criteria
Toronto small business property tax relief has three qualifying pathways; meeting any one is sufficient.
| Path | Applicable Region | CVA assessed value | Additional Conditions |
|---|---|---|---|
| A. Citywide | Anywhere in Toronto | $10,000-$1,000,000 | Commercial or new commercial property category |
| B. Designated Areas | Downtown, waterfront, growth centres, Avenues | $10,000-$7,000,000 | Lot ≤ 7,500 sqft or GFA ≤ 2,500 sqft |
| C. Small Commercial Plaza | Citywide | $10,000-$7,000,000 | Property codes 425/429/430, 2+ businesses, shared parking, ≤25,000 sq ft |
Ineligible property types:Office buildings, large shopping malls, parking lots, vacant land, properties with demolition permits.
Do you need to apply? Most do not
Good News:The vast majority of eligible businesses don't need to do anythingThe municipality automatically determines eligibility based on property assessment data, and the reduction appears directly on the final tax bill.
You can check if your property is on the list here: Toronto's Open Data Portal publishes the eligible property list annually.
If Your Property Is Not on the Prescreening List:You can submit a 'Request for Reconsideration' (RfR). But note: the RfR deadline for the 2026 tax year isApril 2, 2026— If you’re reading this after that date, this year’s designation is locked. Aim to get on next year’s list.
I'm a tenant—how do I get this money?
This is the most common question—and the biggest misconception.
Commercial property tax relief is forproperty ownernot the tenant. The reduction appears on the property owner's tax bill. If you are a tenant, you won't automatically receive any reduction.
But You Can:
- Negotiate with Landlord:Ask your landlord to pass on the tax savings as a rent discount. A CFIB survey shows that many property owners who received tax relief are willing to share it with tenants.
- Negotiate During Lease Renewal:Use property tax relief as a condition in lease negotiations.
- Requirement Transparency:Ask the landlord to show their tax statement to confirm they actually received the reduction.
What other small business support measures are available in Toronto?
Beyond property tax relief, the City of Toronto offers a range of small business support programs:
- CaféTO Grant:Up to $7,500, matching 50% funding, for patio and accessibility improvements.
- Commercial Space Renovation Grant:50% match for interior renovations of vacant or soon-to-be-vacant storefronts
- Digital Main Street：$2,500 digital transformation micro-grant
- Main Street Recovery and Reconstruction Plan:7 sub-programs supporting main street economic recovery
Toronto has 85 BIAs (Business Improvement Areas), representing over 90,000 businesses. Joining your local BIA gives you early access to policy information.
Frequently Asked Questions
Does a 20% reduction mean 20% off your entire tax bill?
No. The 20% only applies to the municipal portion of commercial property tax. However, Ontario automatically matches the education tax portion—so the actual effect is a combined 20% reduction on both municipal and education taxes.
How Do I Check If My Property Is on the List?
Search Toronto's open data website (open.toronto.ca) for 'Small Business Property Tax Subclass' and download the latest PDF list. Or check your property tax bill—it will indicate whether the small business rate applies.
Will the relief automatically renew?
Yes. As long as the property conditions remain unchanged, it applies automatically each year. But if the property is sold, renovated, or its use changes, a reassessment is needed.
Is CFIB pushing for a higher percentage?
Yes. CFIB's goal is to push to the maximum 35% allowed by Ontario law. 20% is a midpoint. Ottawa has also implemented a similar reduction. Currently, only Toronto and Ottawa in Canada have adopted this provincial small business tax class.
Missed the RfR Deadline (April 2) This Year—Is There Still Hope?
The RfR deadline for the 2026 tax year has passed. But you can start preparing materials now and submit your 2027 RfR application as soon as the new list is released at year-end. Alternatively, let Glow Pacifier Consulting first check if your property's physical conditions qualify.
Frequently Asked Questions
Q: Does the 20% reduction apply to the entire tax bill?
No. The 20% only applies to the municipal portion, but Ontario will match the education tax reduction as well.
Q: How can tenants benefit from this relief?
The relief goes directly to property owners. Tenants need to negotiate with their landlords to pass on the tax savings as a rent discount.
Q: How do I check if my property is on the eligible list?
Go to open.toronto.ca and search for 'Small Business Property Tax Subclass' to download the PDF list. Or check your tax bill for the small business tax rate notation.
Q: What if I missed the RfR deadline this year?
The RfR deadline for the 2026 tax year (April 2) has passed. Prepare your materials and submit your 2027 application as soon as the new list is released later this year.
Q: What types of properties are not eligible?
Office towers, large shopping malls, parking lots, vacant land, properties with demolition permits already issued. Provincial law allows municipalities to expand the coverage area, and CFIB is pushing to include retail spaces within office towers.
Want to know how much your business could qualify for?
Glow Pacifier Consulting has helped dozens of Toronto business owners successfully apply for government loans and grants.
Book a Free Assessment →