Tax Abatement

The tax abatement is applied to the new assessed improvements created by the project—so the program focuses the benefit on the added assessment that comes from the new work (in most cases, the taxes on existing building and land assessment stays the same).

Abatement Schedule

  • Year 1: 100%
  • Year 2: 80%
  • Year 3: 60%
  • Year 4: 40%
  • Year 5: 20%
  • Year 6: return to full taxes

Note: Abatements of increased assessed improvements are capped at $500,000.

What “assessed improvements” means:

“Assessed improvements” means the increase in assessed value that comes from the new work (the improvement), such as a building addition, new construction, and certain eligible site work. Under the policy, the abatement applies only to the additional assessment created by that work.

Examples

Example A: Assessment goes from $500,000 to $700,000

  • Before: $500,000
  • After: $700,000
  • Increase (assessed improvement): $200,000

The abatement is calculated on the $200,000 increase, following the phased-in schedule.

So, in Year 1, the abatement is 100% on that increased portion (meaning the taxes on that increased portion are reduced by the full abatement amount for that year). The Notice of Taxes will look similar to the the amount of tax paid the previous year. In later years, the abatement steps down based on the schedule.

Example B: Assessment goes from $500,000 to $1,200,000

  • Before: $500,000
  • After: $1,200,000
  • Increase (assessed improvement): $700,000

Because the program has a $500,000 cap, the abatement applies to:

  • Eligible (capped) increase: $500,000
  • Not abated (over the cap): $700,000 − $500,000 = $200,000

That means the program abates up to $500,000 of the increase (phased in by year). The remaining $200,000 increase is taxed normally from the start. Your Notice of Taxes will show an approximant increase of 40% over the previous year's.


When does the abatement begin?

The tax abatement starts the year following Substantial Completion (90 days after the vapour barrier is approved). Inorder to receave the maximu abatement:

  • If the Substantial Completion is reached on or before October 1, the abatement starts the next January 1.
  • If the Substantial Completion is approved after October 1, the abatement starts January 1 of the year after next.
  • Example: Occupancy Permit approved October 20, 2026, the abatement starts January 1, 2028.