Starting January 1, 2010, 93 per cent of Ontario income tax payers will get a permanent tax cut, as part of a comprehensive tax plan that will help create 591,000 jobs and make the province more attractive for new business investment.

The province is cutting the first income bracket tax rate by one percentage point, from 6.05 per cent to 5.05 per cent. As a result, Ontario will have the lowest tax rate of all provinces on the first income bracket, and an additional 90,000 lower income Ontario taxpayers will no longer pay any provincial personal income tax.

The comprehensive package also includes $10.6 billion in direct payments and permanent tax relief, including the following:

• Starting in August, nearly 3 million low- to middle-income Ontario families and individuals will receive a new, permanent Ontario Sales Tax Credit of up to $260 for each adult and child per year – one of the most generous in Canada.
• An additional $270 million in annual property tax relief, through enhancements to the Ontario Property Tax Credit, will benefit 2.3 million low- to middle-income homeowners and tenants.
• Starting in June 2010, Sales Tax Transition Benefits will benefit 6.5 million Ontario families and individuals – totalling up to $1,000 for families (including single parents) and up to $300 for single people – in 2010 and 2011.

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The 1999 survey released Wednesday was based on 1998 figures. It shows that annual property tax averaged $2,230 in Ontario and $2,030 in Quebec. By contrast, homeowners in Newfoundland and Labrador paid an average of $640.

Canadian homeowners paid 2.9 per cent of family income in property taxes in 1998, one-seventh of the 21.3 per cent they paid in income tax.

However, the ratio between the two taxes differed greatly according to the level of family income, the survey found.
Families with income less than $20,000 paid more than twice as much in property taxes (10 per cent of annual income) as they did in income taxes (four per cent).

Families earning $100,000 or more paid just 1.8 per cent of their income on property taxes and 28.6 per cent on income tax.

The effective property tax rate (tax paid on a property relative to its value) was highest in Quebec and Manitoba at 1.9 per cent, with Saskatchewan following at 1.8 per cent.

All other provinces had rates of 1.2 per cent or lower. In British Columbia, which had the highest property values, the effective rate was just 0.7 per cent.

Homeowners below Statistics Canada low-income cut-offs paid relatively large proportions of their incomes in property taxes: 11.7 per cent for the elderly and 10.8 per cent for the non-elderly.

However, low-income homeowners had much higher assets, in terms of home equity and other financial assets, than low-income renters.

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1059058327636_91

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