The City of Toronto is planning to introduce a 2.2 percent property tax hike in its 2026 budget, as per an announcement from the mayor’s office. This increase is a combination of a 0.7 percent rise in residential property tax and a 1.5 percent increase in the city building levy. Compared to previous years, this proposed raise is notably smaller. Mayor Olivia Chow’s 2024 budget had a 9.5 percent increase, the highest in two and a half decades, due to a $1.8 billion shortfall. In 2025, the increase was 6.9 percent.
Mayor Chow stated that the 2026 budget aims to enhance affordability for Toronto families, addressing the concerns expressed by residents about the escalating cost of living. The detailed overview of the proposed budget is set to be disclosed on Thursday morning. The city’s operating budget deficit had decreased to $1 billion by December.
The potential reduction in tax increase this year is attributed to various initiatives such as the luxury home tax and an additional tax on vacant properties, as mentioned by Mayor Chow in a year-end interview. She emphasized the importance of wealthier individuals contributing more to support the city’s financial needs.
City council recently approved an increase in the municipal land transfer tax for homes valued over $3 million. Budget Chief Shelley Carrol highlighted the city’s commitment to keeping expenses low for taxpayers, indicating that the 2026 budget will be more frugal and purposeful.
It remains uncertain whether Mayor Chow will seek re-election, with speculations about former mayor John Tory considering another bid for the mayoral position. Past trends suggest that if the race narrows down to Tory and Chow, the tax increments may vary significantly, with Tory’s previous increases in 2022 and 2023 being higher than those proposed by Mayor Chow.
Following the budget preview, the city will engage in consultations with the public and relevant agencies before finalizing the budget. The Mayor’s office is expected to release an updated version of the 2026 budget by February 1. The adoption of the annual budget may take 30 to 55 days, subject to potential revisions and negotiation timelines.
