Montreal budget: Residential property taxes climb by 4.9 per cent

Non-residential property owners are also facing bigger tax bills, with an average increase of 4.6 per cent for the coming year

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Stubbornly high inflation means Montreal homeowners should brace for the biggest property tax increase in 13 years.

Residential property taxes in Montreal will climb by an average of 4.9 per cent next year, exceeding the average 4.6 per cent tax hike of non-residential buildings, budget documents show.

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The overall tax hike for residences is the highest since 2010, when Gérald Tremblay was mayor. The increase that year was 5.3 per cent.

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This represents less than the 5.2 per cent inflation rate that was observed in Montreal during the 12-month period ended in August 2023, budget documents show. Inflation for all of Quebec during the period was 4.6 per cent.

Former executive committee chairperson Dominique Ollivier — who resigned Monday following reports that she had incurred lavish spending in a previous job several years ago — had promised last month that property tax bills would be held under the rate of inflation.

At 4.8 per cent in September, Quebec’s inflation rate was the highest in Canada, tied with Nova Scotia. The national average was 3.8 per cent.

Inflation in Quebec is projected to drop to 2.7 per cent next year from an estimated 4.6 per cent in 2023, finance minister Eric Girard said last week as he delivered his midyear economic update.

Taxation is projected to bring in $4.18 billion, or almost 64 per cent of Montreal’s expected 2024 revenue of $5.99 billion. That’s up from a projected 63 per cent slice a year ago.

Eighty-seven per cent of the 2024 increase in residential property taxes is linked to decisions made by City Hall, while the rest stems from decisions made by the boroughs. For non-residential property taxes, City Hall’s share of the adjustment is 97 per cent.

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Overall increases by borough for residential properties range from 2.6 per cent in Ville-Marie to 6.3 per cent in Anjou and 7.2 per cent in Pierrefonds-Roxboro. The average value of a single-family home in Pierrefonds-Roxboro is $601,100.

The 4.9 per cent average increase in residential property taxes translates into an additional cost of $227 a year for homeowners, budget documents show. The annual tax bill for the average Montreal residence — which is valued at $694,541 — will climb to $4,892 from $4,665, the documents show.

For a single-family home, the average jump in residential taxes for all of Montreal amounts to 3.6 per cent, or $161 a year. That compares with average increases of 3.7 per cent, or $113, for condos and 5.1 per cent, or $254, for plexes, which are defined as properties with two to five dwellings.

The average value of a single-family home in Montreal $651,406, according to the city. This compares with $446,427 for a condo and $742,605 for a plex.

Non-residential property owners are also facing bigger tax bills. The average 4.6 per cent hike for 2024 compares with increases of 2.9 per cent a year ago and 1.9 per cent in 2020.

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The sting of higher levies will be felt most acutely in Lachine, where non-residential property owners will see their taxes soar 14.3 per cent. Other significant increases include St-Laurent’s 12.1 per cent and Anjou’s 9.8 per cent.

Ville-Marie is the only borough that plans to cut non-residential property taxes next year, by 0.9 per cent.

City Hall is maintaining its differentiated tax rate for non-residential properties, which ensures that buildings valued at less than $900,000 receive a lower tax rate. Owners of more than 90 per cent of non-residential properties benefit from the measure.

Montreal introduced the differentiated rate for non-residential buildings in time for the 2019 fiscal year, shifting a bigger share of the burden to more valuable properties.

For 70 per cent of non-residential properties, those with a value of $900,000 or less, the differentiated tax rate has the cumulative effect of reducing the total tax burden of property owners by 16 per cent, Montreal says.

Parking lot owners will see their property taxes indexed by about 3 per cent next year, Montreal also said. The increase applies to areas such as the city’s central business district.

Tax rates on parking lots vary depending on whether the property is indoor or outdoor. They also vary depending on the location of the parking lot.

For the first time in 2024, non-residential property owners will also be asked to pay a water tax based on consumption. Montreal sees volumetric pricing as an “eco-fiscal” measure to finance water services.

The rate, which applies to non-residential buildings equipped with a water meter, increases according to the building’s consumption – for a top rate of 60 cents per cubic metre if annual water usage exceeds 100,000 cubic metres.

Properties that consume less than 1,000 cubic metres of water a year pay no water tax. Property owners were sent a mock bill this year informing them of their consumption.

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This article will be updated.

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