If you opened your property tax bill in 2024 or 2025 and felt your jaw hit the floor, you weren’t alone.
For a long time, living in Toronto came with a secret perk. Sure, the houses cost a million dollars, and the traffic is a nightmare, but the property taxes? They were surprisingly gentle. For decades, Toronto homeowners enjoyed rates that were the envy of the 905 belt.
But that era is effectively over.
With the massive hikes we’ve seen recently—specifically the historic jump in 2024—the bill has finally come due. But to understand why your wallet is hurting now, looking at this year’s budget isn’t enough. You have to look back. We need to rewind about fifty years to understand the political decisions, the “revenue tools,” and the amalgamation battles that brought us here.
I’ve spent a lot of time crunching these numbers, looking at the history of this city through the lens of its budget. And honestly? It’s a story of politicians kicking the can down the road until they ran out of road.
Here is the definitive, 50-year history of Toronto property taxes.
The Mechanics: How Toronto Property Tax Actually Works
Before we dive into the history books, we need to clear up a misconception that drives me crazy.
People often confuse the Tax Rate (the mill rate) with the Tax Bill.
Here’s the simple formula: Assessed Value (MPAC) x Tax Rate = Your Tax Bill
In Toronto, the City Council decides how much money they need to run the city (libraries, police, TTC, potholes). Once they have that total number, they divide it by the total value of all properties in the city. That gives them the rate.
So, when property values skyrocket, the city should lower the tax rate to keep the total revenue stable. And they do. That’s why Toronto’s “rate” looks so low compared to, say, Sault Ste. Marie. A 0.6% tax rate on a $1.5 million Toronto semi-detached pays the city the same cash as a 1.5% rate on a $600,000 house elsewhere.
Keep that in mind. When we talk about “Tax Increases” in this history, we are talking about the percentage increase in the city’s revenue demand, not necessarily the change in your home’s market value.
The Pre-Amalgamation Era (1975–1997): A Tale of Two Cities
History gets a bit messy before 1998.
If you lived here in the 70s or 80s, you know “Toronto” wasn’t just one thing. We had a two-tier system. You had the local cities—Etobicoke, Scarborough, North York, York, East York, and the old City of Toronto—and then you had “Metro Toronto” acting as the big umbrella government.
You paid taxes to both.
During the late 70s and early 80s, tax increases were fairly standard, usually tracking with the high inflation of that era. But the 1990s were the real pressure cooker.
The “Downloading” Crisis
In the mid-90s, the provincial government (under Mike Harris) started “downloading” costs to municipalities. Suddenly, the city was responsible for social housing, transit costs, and other services that used to be provincial headaches.
This created a massive fiscal gap. Taxes had to rise, or services had to be cut. The old City of Toronto generally had higher taxes and higher service levels, while places like North York (led by a guy named Mel Lastman) prided themselves on being frugal.
This tension set the stage for the biggest event in Toronto’s fiscal history.
The Turning Point: The 1998 Amalgamation
1998 changed everything. The province forced the six boroughs to merge into the “Mega City” of Toronto.
The promise? Efficiency. Cost savings. “Synergies.” The reality? It was expensive.
But for taxpayers, it kicked off a very specific political era.
Mel Lastman (1998–2003): The Zero Era
Mel Lastman became the first mayor of the Mega City. He was a salesman at heart (remember the “Bad Boy” furniture ads?), and his pitch to voters was simple: No tax hikes.
And amazingly, he did it. For the first three years of the amalgamated city (1998, 1999, 2000), the property tax increase was 0%.
Sounds great, right? Well, yes and no. While our bank accounts were happy, the city was cannibalizing itself. To fund that 0% freeze, the city raided reserve funds, deferred maintenance on infrastructure, and relied on provincial handouts to balance the books.
We are still fixing bridges and pipes today that should have been repaired in 1999. This was the beginning of the “structural deficit.”
The Modern Era: 2003 to Present
When Mel Lastman left, the city was broke. The “efficiencies” of amalgamation hadn’t materialized, and the costs of running a massive city were piling up.
David Miller (2003–2010): Building the City (and the Revenue)
David Miller came in with a mandate to clean up the city and invest in it. But investments cost money.
Under Miller, we saw the end of the tax freezes. Property taxes generally went up by about 3% to 4% annually. People grumbled, but it was necessary to catch up.
But Miller’s biggest legacy wasn’t the property tax rate. It was the “New Revenue Tools.” Realizing that property owners couldn’t foot the whole bill, Miller introduced the Municipal Land Transfer Tax (MLTT) and the Vehicle Registration Tax.
The MLTT was a cash cow. Every time a house was sold, the city took a cut. As the real estate market exploded, this tax poured billions into city coffers, effectively masking how low the property taxes still were. It was an addiction the city couldn’t break.
Rob Ford (2010–2014): “Respect for Taxpayers”
Then came Rob Ford. His entire platform was built on anger. Anger at the “gravy train,” anger at the Vehicle Registration Tax (which he killed immediately), and anger at spending.
In his first budget (2011), Ford managed a 0% tax increase again. He did it by slashing budgets and finding efficiencies, but also by using surplus funds from the previous year.
For the rest of his term, increases were modest—around 2% to 2.5%. Ford’s era reinforced the expectation among Toronto voters that taxes should stay low, regardless of what was happening in the wider economy.
John Tory (2014–2023): The “Below Inflation” Promise
John Tory was the longest-serving mayor in this timeline, and his fiscal policy was incredibly consistent. His promise: Tax increases would be at or below the rate of inflation.
For almost a decade, he kept that promise. If inflation was 2%, taxes went up 2%. If inflation was 1.8%, taxes went up 1.8%.
On the surface, this seemed like good management. It was “Boring,” and Toronto voters love “Boring.” But underneath, two things were happening:
- The City Building Fund: Tory realized he couldn’t build transit or fix housing on inflation-level hikes alone. So, he added a separate levy called the “City Building Fund.” It added another 1.5% on top of the base tax, but legally, he could still say the base tax was only rising by inflation. It was a clever bit of accounting gymnastics.
- The Infrastructure Gap: By keeping taxes tied to inflation (CPI), the city lost purchasing power. The cost of construction (concrete, steel, labour) rises much faster than the cost of a basket of consumer goods (milk, bread).
By the time Tory resigned in 2023, the city was facing a massive budget hole, largely exposed by the loss of transit revenue during COVID.
The Correction: Olivia Chow (2023–Present)
This brings us to the present day. When Olivia Chow took office, the books were a disaster. The “rainy day funds” were gone. The “COVID bailouts” from the federal government had dried up. And the refugee shelter crisis was costing the city hundreds of millions.
The 2024 Shock
In 2024, the band-aid was ripped off. Toronto City Council approved a 9.5% property tax increase. When you added the City Building Fund, the total hike was closer to 10.5%.
It was the largest single-year increase since amalgamation. People were furious. But from an economic standpoint, it was a “market correction.” After 15 years of keeping taxes artificially low (below the real cost of city inflation), reality caught up.
The 2025 Outlook
For 2025, the pressure hasn’t really let up. While not as catastrophic as 2024, the city is still looking at increases above the historical average to service debt and manage the transit deficit. We are settling into a “new normal” where 4-6% hikes might be the baseline, not the exception.
Data Deep Dive: Toronto Tax Increases vs. Inflation (1998–2025)
I put together this table to visualize just how often Toronto taxes lagged behind the real world. Pay attention to the “Real Increase” column—that’s the difference between the tax hike and inflation.
| Year | Mayor | Residential Tax Hike % | Inflation (CPI) % | Context |
|---|---|---|---|---|
| 1998 | Lastman | 0.0% | 1.0% | Amalgamation freeze |
| 1999 | Lastman | 0.0% | 1.7% | Freeze continues |
| 2000 | Lastman | 0.0% | 2.7% | Freeze continues (Revenue loses value) |
| 2001 | Lastman | 5.0% | 2.5% | The first catch-up |
| 2005 | Miller | 3.0% | 2.2% | Investment era begins |
| 2008 | Miller | 3.75% | 2.3% | Land Transfer Tax introduced |
| 2011 | Ford | 0.0% | 2.9% | Ford’s “Gravy Train” freeze |
| 2012 | Ford | 2.5% | 1.5% | Modest increase |
| 2015 | Tory | 2.25% | 1.1% | Tory’s “inflation matching” begins |
| 2017 | Tory | 2.0% | 1.6% | City Building Levy expands |
| 2020 | Tory | 2.0% | 0.7% | COVID onset |
| 2022 | Tory | 2.9% | 6.8% | Massive real-dollar cut due to high inflation |
| 2023 | Tory/Chow | 5.5% | 3.9% | Beginning of the correction |
| 2024 | Chow | 9.5% | ~2.5% | The historic hike |
| 2025 | Chow | Est. 5-7% | ~2.0% | Stabilization attempts |
Note: Percentages refer to the residential tax rate increase. Total bill impact often included additional levies like the City Building Fund.
Look at 2022. Inflation was running at nearly 7%, but taxes only went up 2.9%. That meant the city effectively took a 4% pay cut that year in terms of purchasing power. That creates a hole that eventually has to be filled. That’s what 2024 was.
Comparative Analysis: Is Toronto Actually “Low Tax”?
This is the argument you hear at every dinner party in the GTA. “My friend in Mississauga pays double what I pay!”
Is it true? Yes. Historically, Toronto has had the lowest tax rate in the Greater Toronto Area.
Why? Two reasons:
- Density: It is cheaper to provide services (sewage, garbage, police) to a condo tower downtown than to a sprawling suburb of detached homes in Markham. Toronto has scale.
- Commercial Tax Base: Toronto has the downtown financial core. Office towers pay a massive chunk of the city’s bills. Bedroom communities like Brampton or Durham Region don’t have as many skyscrapers to offset the residential tax burden.
However, the gap is closing. As office values drop (thanks to work-from-home) and Toronto’s residential rates spike, the “Toronto Advantage” is eroding.
Conclusion: The End of Cheap Living?
So, what does this 50-year history tell us?
It tells us that for a very long time, Toronto homeowners were shielded from the true cost of running a world-class city. We had mayors—from the right and the left—who were terrified of angering the homeowner voting bloc.
We used the Land Transfer Tax like a credit card, hoping the housing market would never crash. We deferred maintenance. We kept increases below inflation.
The history of Toronto tax increases isn’t just a list of numbers; it’s a story of avoidance. Now, under the current administration and economic reality, we are paying the bill for decades of “0% increases” and “below inflation” promises.
Is it painful? Absolutely. But if you look at the chart, it was probably inevitable.