Through the enhanced Small Business Property Tax Subclass, the City has increased the municipal tax reduction from 15% to 20%, delivering meaningful relief to approximately 28,000 small businesses across Toronto.
If you own commercial property, lease retail space, or invest in mixed-use buildings, this change directly impacts your bottom line.
Let’s break it down.
What Changed in Toronto’s 2026 Budget?
Toronto City Council approved an increase to the Small Business Property Tax Subclass, raising the discount on the municipal portion of commercial property taxes from 15% to 20%.
The Province of Ontario has confirmed it will match the increase for the education portion of property taxes — effectively amplifying the total savings for eligible properties.
According to the City:
About 63% of all commercial properties in Toronto qualify
More than 95% of Toronto businesses employ fewer than 100 people
Small businesses support nearly 1 million jobs — over 50% of total city employment
Toronto is home to 10,000+ restaurants and dining establishments
This is not a minor adjustment. It’s a strategic move to stabilize Toronto’s main streets during ongoing economic pressure.
Why This Matters for Commercial Property Owners
Lower commercial property taxes mean:
✔ Lower operating costs
✔ Improved cash flow
✔ Greater tenant stability
✔ Reduced vacancy risk
✔ Higher property retention rates
For landlords, especially those with retail tenants on main streets like the Danforth, Queen West, or Bloor, this could translate into stronger lease renewals and improved tenant sustainability.
For owner-operators, this means real dollars back into the business.
The Bigger Economic Strategy
The tax cut aligns with Toronto’s broader economic resilience plan, which focuses on:
Affordability
Small business survival
Local job protection
Main street revitalization
Preparing for global events like the 2026 FIFA World Cup
Toronto is positioning itself as a competitive, business-friendly city — especially important as commercial vacancy and operating costs remain key concerns in 2026.
Additional Small Business Supports in Toronto
The City isn’t stopping at tax relief. Additional programs include:
1. Business Improvement Areas (BIAs)
Toronto has 86 BIAs citywide, supporting beautification, marketing, and capital projects across commercial corridors.
2. CaféTO Grants (Up to $7,500)
Patio improvements, accessibility upgrades, and streetscape enhancements.
3. Red Tape Hotline
Now becoming a permanent service to help businesses address permitting delays and regulatory barriers.
4. Upcoming Small Business Office
A centralized hub to streamline support and improve coordination across City services.
What This Means for Real Estate & Financing
For commercial investors and mixed-use property owners, tax relief can:
Improve NOI (Net Operating Income)
Strengthen refinance positioning
Increase valuation stability
Reduce risk exposure during economic shifts
However, not all businesses or property owners qualify — eligibility criteria still apply.
If you're restructuring debt, refinancing commercial property, or navigating cash flow pressure, strategic financing becomes critical.
Commercial Property Financing in Toronto (2026 Outlook)
Many property owners in Toronto are currently:
Facing higher renewal rates
Managing tenant turnover
Refinancing maturing commercial mortgages
Repositioning mixed-use assets
Traditional lenders may tighten underwriting during uncertain cycles.
That’s where equity-based lending becomes relevant.
At Lendworth Financial Corp., we specialize in:
Commercial private mortgages
Second mortgages
Bridge loans
Equity-based lending (not income-driven approvals)
Fast approvals for time-sensitive transactions
We focus on property value — not just tax returns.
If your commercial property has equity, you may have options.
Who Should Pay Attention?
This tax change matters if you:
Own a retail plaza in Toronto
Operate a restaurant or storefront business
Hold mixed-use commercial property
Are refinancing in 2026
Need short-term capital to stabilize operations
The market is shifting — and capital flexibility is key.
Toronto 2026: Opportunity or Pressure?
Lower property taxes are a positive sign.
But rising rates, refinancing pressure, and evolving tenant demand still create challenges.
The question isn’t just:
“Are taxes lower?”
The real question is:
“Is your property structured properly for 2026?”
Speak to a Private Lender Today
If you own property in Toronto and need:
Commercial refinancing
Equity access
Bridge capital
Solutions outside traditional banks
Call 905-597-1225
Visit www.lendworth.ca
Your Equity Deserves More™.