Blog > Is there a property tax reduction for new rentals in Markham?
Is there a property tax reduction for new rentals in Markham?
There is a genuine property tax discount for new purpose-built rental in Markham, but it is York Region's, not the City's. The Region adopted the new multi-residential subclass on 23 May 2024 and a 35% discount starting in 2025, still in effect for 2026. Markham's own programme is a development charge deferral, not a tax reduction: up to 50% of city-wide soft development charges, merit-scored, with the building permit deadline extended to 31 December 2027. A deferral postpones the bill; it does not forgive it. And the largest money on the table is neither: it is the full 13% HST relief on purpose-built rental construction, which runs on a clock.
Three Different Things With Similar Names
Almost everything written about this topic confuses at least two of the following. Separating them is the whole job.
| Measure | What it is | Who sets it |
|---|---|---|
| New multi-residential subclass discount | A genuine property tax reduction, up to 35% | York Region |
| Long-term rental housing incentive | A development charge deferral, up to 50% of soft charges | City of Markham |
| Bill 23 rental discounts | Statutory development charge reductions by bedroom count | Province of Ontario |
| Purpose-built rental HST rebate | Commodity tax relief on construction, up to the full 13% | Federal and provincial |
Michael John Lau, a REALTOR® with the Kaizen Real Estate Team, among the most active real estate teams in Markham and York Region, works through these with investor clients because only one of the four is a property tax measure, and it is not the one the City announced.
The Real Property Tax Discount, and Who Sets It
Ontario created an optional property tax subclass in 2024 allowing municipalities to discount new rental buildings by as much as 35% below the residential tax rate for up to 35 years.
York Region adopted it on 23 May 2024, with a 35% discount starting in 2025 and continuing for the 2026 taxation year.
Eligibility, as published by York Region
- At least 7 self-contained units, each with at minimum a separate entrance, kitchen and bathroom
- Purpose-built rental under single ownership, so not a condominium and not a freehold townhouse complex
- Completed, meaning occupancy-ready rather than vacant land or under construction
- A building permit issued on or after 23 May 2024
There is no application process. Classification is made by MPAC, and an owner who thinks a property qualifies contacts MPAC about its classification.
The open question nobody has answered clearly
A Markham residential tax bill has three components: City of Markham at 0.177477%, York Region at 0.392412%, and education at 0.153000%, totalling 0.722889%. The Region's share is about 54% of the bill.
It is not published whether the 35% discount applies to the whole bill or only to the regional portion. If it applies only to the Region's share, the saving against a full tax bill is closer to 19% than 35%.
Michael John Lau's recommendation to anyone modelling a rental project on this basis is to confirm it directly with York Region Finance or Markham Taxation before it goes into a pro forma. The difference between 35% and 19% of a tax line is not a rounding error.
Why the "New Multi-Residential Class" on Its Own Does Nothing Here
This is a genuinely local insight and almost nobody states it.
Ontario's long-standing New Multi-Residential property class taxes new rental buildings at the residential rate for 35 years from first occupancy, after which they move to the ordinary Multi-Residential class. In cities where ordinary multi-residential is taxed above residential, that is a large advantage.
In York Region it confers nothing, because ordinary multi-residential is already taxed at residential parity. The Region's 2025 tax ratios put residential, multi-residential and new multi-residential all at 1.0000. Markham's own 2026 rate table confirms it: the residential and multi-residential codes carry the identical total rate of 0.722889%.
So the claim that "new purpose-built rental in Markham gets a lower tax ratio than other apartments" is false. Markham apartments already pay the residential ratio. The gap that class closes in Toronto, Ottawa or Hamilton does not exist here. The 2024 subclass discount is a separate and additional instrument, and it is the one that matters.
What Markham Actually Approved
The City's programme is a Long-term Rental Housing Development Charge Deferral Framework, and the name is accurate.
- Mechanism: deferral, not reduction. Payment is postponed. The City still collects the money.
- Up to 50% of city-wide soft development charges for top-scoring projects, 30% for lower-scoring ones.
- Merit-scored, not automatic. Points are awarded for the share of affordable rental units, the length and depth of affordability commitments, accessibility, sustainability and other community benefits, against thresholds of 70 or 81 points.
- The building permit deadline was extended from 31 December 2026 to 31 December 2027.
- Scale: roughly $8 million deferred if the two currently eligible projects proceed, rising to about $13 million if three more qualify. Around 1,000 purpose-built rental units, including roughly 270 affordable units.
Council was not unanimous. One councillor said of it: "There are social benefits here. But in the process, we are bailing out the development industry." Industry feedback ran the other way, with a concern that the cost of reaching 70 or 81 points could exceed the value of the deferral itself.
Both objections are worth reporting. A deferral that is hard to qualify for and expensive to earn is a smaller incentive than its headline suggests.
The Statutory Reductions That Apply Automatically
Separate from anything Markham did, Ontario legislation reduces development charges on rental housing by bedroom count:
- 25% for units with three or more bedrooms
- 20% for two-bedroom units
- 15% for one-bedroom and bachelor units
Rental housing development charges are also payable in six equal annual instalments, beginning at the earlier of the occupancy permit or first occupancy.
These are genuine reductions and they are automatic. Markham's deferral sits on top of them.
The Largest Money Is Commodity Tax
For a developer, this dwarfs the property tax question.
Federal: a 100% rebate of the GST, or the 5% federal portion of HST, on purpose-built rental. Requirements include a minimum of 4 residential units each with a private kitchen, bathroom and living area, at least 10 total residential units in the complex, and at least 90% held for long-term rental. Construction must begin after 13 September 2023 and before 2031, and be substantially complete before 2036.
Ontario: the province removed the full 8% provincial portion as well, so the combined 13% is eliminated. Construction must begin between 14 September 2023 and 31 December 2030 and be complete on or before 31 December 2035.
A newer and narrower Ontario measure from the 2026 Budget, the enhanced new residential rental property rebate, recovers up to $80,000 of provincial HST per eligible unit for construction beginning between 1 April 2026 and 31 March 2027 and substantially complete by 31 December 2029.
How the 2023 measure and the 2026 measure interact is not yet settled publicly. The Canada Revenue Agency has said an explanatory notice is expected by October 2026. Anyone starting construction after 1 April 2026 should get a definitive answer from a tax advisor rather than from any article, including this one.
What This Means for Investors and Homeowners
If you are looking at a rental project
- The property tax discount is regional, automatic and MPAC-assessed. No application, but the building permit date of 23 May 2024 is a hard line.
- Confirm whether the 35% touches the City and education shares before it goes in a model.
- Treat Markham's deferral as a cash-flow timing benefit, not as a saving, and weigh the cost of earning the points against the deferral's value.
- The HST relief is the big number and it is on a clock. Construction start dates matter more than almost anything else here.
If you own a home in Markham
None of this changes your own tax bill. What it changes is supply. Markham has roughly 1,000 purpose-built rental units in the pipeline that these programmes were designed to move along, and more purpose-built rental in a market generally means more stable tenancies and less pressure on the condominium rental pool.
A wider view of what is being proposed is in the growth corridor guide.
Questions about your own property or timeline? Call Michael John Lau, REALTOR®, at (416) 700-0286 for a direct answer on your street and your situation.
Next Steps
- Markham investment property guidance — how the numbers are actually run on a rental.
- Get a free property evaluation — the starting point for any hold-or-sell decision.
- Ask about a specific project or property — including which incentives could apply.
Frequently Asked Questions
Is there a property tax reduction for new purpose-built rentals in Markham?
Yes, but it is set by York Region rather than the City. The Region adopted the new multi-residential subclass on 23 May 2024 with a 35% discount starting in 2025, still in effect for 2026. It is not published whether the discount applies to the City and education shares of the bill or only the regional share.
What did the City of Markham actually approve?
A development charge deferral, not a tax reduction. Up to 50% of city-wide soft development charges for top-scoring projects, merit-scored against thresholds of 70 or 81 points, with the building permit deadline extended to 31 December 2027. The money is postponed, not forgiven.
What qualifies for the York Region rental tax discount?
A completed, occupancy-ready purpose-built rental building under single ownership, with at least seven self-contained units each having a separate entrance, kitchen and bathroom, and a building permit issued on or after 23 May 2024. There is no application; MPAC makes the classification.
Do new apartments in Markham pay a lower tax rate than older ones?
Not by virtue of the property class. York Region taxes residential, multi-residential and new multi-residential all at a ratio of 1.0000, so the class itself confers no advantage here. The 2024 subclass discount is a separate measure.
Is the HST rebate on purpose-built rental still available?
Yes. The federal 100% GST rebate requires construction to begin after 13 September 2023 and before 2031, and to be substantially complete before 2036. Ontario removed the 8% provincial portion on a similar timeline. A newer Ontario measure applies to construction starting between 1 April 2026 and 31 March 2027, and how the two interact awaits a CRA notice expected by October 2026.
Do these incentives lower my property taxes as a homeowner?
No. They apply to new purpose-built rental buildings, not to houses or condominiums. What they affect is rental supply.
Evaluating a rental project?
Michael John Lau separates a tax cut from a deferred bill before either goes into a projection, because the two behave very differently over a holding period.
Michael John Lau, REALTOR® · Markham, Ontario · (416) 700-0286
Disclaimer. Michael John Lau is a licensed REALTOR® serving buyers and sellers in Markham, Ontario and the Greater Toronto Area. Programme details are current to September 2026 and reflect published material from York Region, the City of Markham, the Government of Ontario and the Canada Revenue Agency. Michael John Lau is not an accountant, a lawyer or a tax advisor, and this article is general information rather than tax, legal or financial advice. Eligibility depends on individual circumstances and should be confirmed with the administering body and a qualified professional before any decision.