An accounting error at City Hall is going to cost Toronto property owners big.
According to a report in The Toronto Star, the previously announced 3.75 per cent property tax increase in the current budget has to be raised to almost 4.08 per cent to make up for an overlooked tax break for small businesses.
The city has been gradually shifting the burden away from businesses since 2005, and asking homeowners to pay a bigger share. Homeowners in Toronto currently pay lower taxes than those in other parts of the GTA, while business owners are taxed more heavily.
Business taxes are still expected to go up by the planned 1.25 per cent. However, small businesses will get a slightly lower rate thanks to a program approved by council three years ago that shifts some of their burden to homeowners over a 10-year period.
When drafting the budget at the end of 2007, Mayor David Miller promised to keep tax increases in line with inflation, which he defined as 3 to 4 per cent.
However, the most commonly used inflation measure, Consumer Price Index, was only up 1.8 per in February compared to February 2007.
