Even if the budgets of the cities have not yet been voted, there is already talk of future increases on the tax bills of individuals and merchants in 2024.
Indeed, cities are also affected by inflation, employee wage increases, construction/renovation costs and they have to find ways to finance all their commitments.
As for instance in Montreal, the fear of a significant increase is more than present. Indeed, the boroughs have just voted for average increases of 9.3% in the 11 boroughs that had already approved their budgets as of October 4. (1)
As we can read “These local taxes represent only a small portion of the final bill sent to rental housing owners in the metropolis, but they give an idea of the impact of inflation on municipal finances.”
Following these revelations, the Mayor of Montreal, Mme Valérie Plante, did not want to commit to capping the Montreal 2024 budget below inflation. (2)
In a reversal of the situation on October 6, the City of Montreal will not increase municipal taxes beyond inflation, promised the president of the executive committee, Dominique Olivier. (3)
Even in terms of inflation, this statement is cause for concern for Montreal rental housing owners.
Here are some revealing figures:
• 2023 Montreal budget: + 4.1%, the highest since 2011.
• Inflation in August 2023: 4.6%.
• The Bank of Canada has said it is staying the course to decrease to 2%
inflation.
For the Association des Propriétaires du Québec (APQ) this is really bad news to come.
In addition to paying several hundreds of dollars more on the next tax bill, building owners will still find themselves in 2024 playing the role of tax collectors and they will have to deflect the increase suffered on the calculation of the 2024 rent increase.
Since Bill 31 does not address the inconsistencies in the calculation of rent increases, landlords will have to use the “good” old-fashioned method of the 1980s:
• Municipal Tax Adjustment: Year 2024 - Year 2023 = Amount Taken into Account in the Calculation.
The only hope that remains is that the record year of 2023 at 4.1% also remains as the record year and that 2024 does not hide an increase of about 9% as the boroughs of Montreal have just voted.
We will have to wait until the end of November or December for the municipalities to adopt their budgets and for us to see the real impact of such decisions.
2024 taxes, new and even bigger increases next year?
