You might be eligible for a rent reduction. The Residential Tenancies Act allows tenants to automatically reduce their rents when property taxes on their buildings have decreased more than 2.49% year over year for the previous two years. The same legislation requires municipalities to provide notices to landlords and tenants of buildings with more than six residential units, and Toronto City Council has extended this requirement to include rental residential buildings with six or fewer residential units.

Notices are mailed out to landlords in September and to tenants in December each year. The rent reduction starts December 31 of the year when the tax decrease occurs, although generally it is applied beginning with the January rent payment. 

Calculating the Rent Reduction
The rules for calculating the rent reductions are set out in the Residential Tenancies Act.

The City calculates the rent reduction percentage by multiplying the tax decrease percentage for each building by:

20% if the residential rental property has more than 6 units
15% if the residential rental property has 6 or fewer units
The 20% and 15% figures are based on the Province of Ontario’s estimate that property taxes for rental residential properties represent either 20% or 15% of the rent charged.

Here is an example of how the percentage rent reduction is calculated for a residential rental property with more than 6 units:

2008 Property Taxes [a] $350,000
2009 Property Taxes [b] $330,000
Reduction in Taxes [c] $20,000 (a – b)
Tax Reduction % [d] 5.71% (c ÷ a x 100)
Rent Reduction % [e] 1.14% (d x 20 ÷ 100)
If the rent is $800 per month, the rent reduction would be:

$800 x 1.14 ÷ 100 = $9.12 per month
New rent $800 - $9.12 = $790.88

In Ward 37 there are 134 properties that have received a rent reduction, which affects 3,858 units.  To see a full list of the properties please download here.