There is no disputing that living on Toronto Island is a privilege held by a very few people. The price of homes on Algonquin and Ward’s islands are strictly governed. And it usually takes winning a lottery, held once every two years, and then sitting on a waiting list for many more years before people have the opportunity to buy, if they ever do. Now, two city councillors will attempt to level the playing field to some degree with a motion that would bring Island residents’ property taxes more in line with the rest of Toronto.
On Feb. 6, city council will deliberate on a motion dubbed Tax Fairness for All: An Equitable Approach to the Residential Property Tax Rate on Toronto Island proposed by councillor Jon Burnside and seconded by councillor James Pasternak.
The motion aims to address the unique circumstances surrounding residential property taxes on Toronto Island. Currently, according to the motion, homeowners on the island benefit from significantly lower property tax rates compared to other parts of the city. This is primarily due to the fact that while residents own their houses, they lease the land from the city, resulting in taxes being assessed solely on the property’s value rather than the combined value of land and property.
According to information on the Toronto Islands Residential Community Land Trust site, the price of an island home “ranges from around $50,000 to $700,000, with the average house in the $150,000 – $400,000 range (not including the one-time lease cost).”
In addition to the cost of the home, purchasers also pay a one-time lease charge, the cost of which is set by legislation.
Island residents enjoy a favourable tax position due to these circumstances, while also enjoy the full range of municipal services the cost of which is reportedly three times higher than some other areas of the city.
As a result, as pointed out in the motion “Toronto Island residents pay significantly lower residential property taxes than everyone else. For example, the average Toronto Island home owner pays approximately $1,530 per year, whereas the average Flemingdon Park tenant pays $4,320 in property tax annually in their rent.”
The councillors, through this motion, are proposing something called an “area rating” tool. It would allow the city to essentially create a custom tax rate for unique circumstances such as living on Toronto Island.
“With the current residential property tax rate, Toronto Island residents are not paying their fair share,” reads the motion. “In fact, the provision of their municipal services is heavily subsidized by taxpayers across the rest of Toronto.”
It is worthwhile noting that living on Toronto Island is affordable and open to all. And, any move to make it more expensive might run the risk of making it a less-accessible option for Toronto residents and in turn making it less equitable.
No doubt, Island residents will have their say. The area has a long history of standing up for Islander rights dating back to the ’60s when the city tried to bulldoze the cottages to create more park space. It wasn’t until 1993 that Islanders had legislation that would protect them, in the creation of the Toronto Islands Residential Community Stewardship Act.
Yes, the residents of the 262 cottages are lucky and enjoy a unique and tranquil lifestyle. It is also a cherished slice of Toronto history, as well as the city’s largest car-free neighbourhood.
If adopted, the motion would require a report back to city council by the end of the second quarter of 2024, outlining the potential implementation of the area rating for Toronto Island properties.