Are Residential Taxes Higher Or Lower Than Commercial?

Commercial real estate is subject to property taxes (or liens) like residential property. Commercial properties are usually worth more than homes, and they generate income, so their property tax bills are higher.

What Is The Difference Between Residential And Commercial Property?

Residential properties are only used for private living quarters, while commercial properties are used for business purposes. A commercial facility is a hospital, assembly plant, storage facility, shopping center, office space, or other location where a business is operated.

How Much Is Commercial Property Tax In Ontario?



​Ontario Average (Population >100,000)


​Office Buildings



​Neighbourhood Shopping


​ ​ ​Industrial

​Standard Industrial (<125,000 square feet)



​Large Industrial (>125,000 square feet)


How Do Taxes Work On Commercial Property?

If you own commercial property, you must pay federal income tax. The rental property can be deducted from your taxable income for any expenses incurred. Profits are taxed only on profits, not on gross income. Make sure that your rents are set in a way that allows you to deduct federal income tax.

What Tax Do You Pay On Commercial Property?

Remember that capital gains will be included in individuals’ tax rates for the year, so some gains for basic-rate taxpayers will be taxable initially at 18% and then at 28%. In the case of commercial property gains, the basic and higher/additional rates are 10% and 20%, respectively.

Do I Need To Pay Tax On Commercial Property?

The tax on rental income from let commercial properties is imposed. Interest and letting agent fees are examples of revenue expenses that can be deducted. A lessor is an individual, a trust, or a company, depending on their tax status.

How Much Is Commercial Property Tax In Toronto?


City Tax Rate

Total Tax Rate







New Multi-Residential



Commercial General



How Much Is Commercial Tax Canada?

Province or territory


Lower rate


Higher rate


Business limit


What Can You Write Off On Commercial Property?

The cost of mortgage interest, maintenance costs, property management expenses, and many other operating expenses can also be deducted from an investor’s income tax.

Can I Get Tax Benefit On Commercial Property?

Section 24 of the Income Tax Act allows deductions for income from commercial property (annual value): a standard deduction and an interest deduction. Repairs, insurance, electricity, water supply, etc. can be deducted at a rate of 30% of their annual value.

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