Toronto is cutting development charges by up to 60 per cent
A $1.5 billion federal and provincial deal pays the city to stop taxing construction so heavily. On a two-bedroom apartment the charge falls by about $48,000.
Toronto has secured $1.5 billion through the Canada–Ontario Partnership to Build in return for reducing residential development charges by 40 to 60 per cent from 2026 through 2029. The federal and provincial governments announced the partnership on 30 March 2026.
The numbers are large in absolute terms. The development charge on a single-family home could fall by as much as $70,000. On a two-bedroom apartment the charge drops by about 60 per cent, to roughly $32,276 — which is to say that the charge on a two-bedroom apartment was previously about $80,000.
What it does and does not do
A development charge is a cost of building, so cutting it improves the arithmetic of a project that does not currently work. Whether that shows up as more housing or as wider developer margins depends on competition, and reasonable people disagree about which. What is not in dispute is that projects at the margin of viability are the ones that move first, and in this market a great deal is at the margin.
For a buyer of a new home, the effect is indirect and slow: charges are paid by the builder at permit, so the saving reaches purchase prices through future projects rather than ones already selling.
Development applications filed near an address appear on every Homula listing, from the municipality’s own planning records — so a tower proposed behind the garden is not a surprise after closing.
Sources
- City of Toronto — $1.5 billion Canada–Ontario Partnership to Build
- Prime Minister of Canada — partnership with Ontario to cut taxes on housing
Figures are as reported by the sources above on the date of publication. Nothing here is advice about a particular property or a particular household — for that, ask someone who can see your circumstances.