High taxes in Canada are acting as a barrier to potential commercial real estate investors, it has been claimed.
According to a new study by Cushman and Wakefield property tax services, the charges make up a "massive 53 per cent of commercial property rents", the Toronto Star reports. The US has the second highest tax rate at 41 per cent, but that is still a full 12 points below Canada's, according to the body.
"The alarmingly high total tax rate for Canada is largely the combined result of high levels of tax, which includes income and real estate taxes," said Keith O'Donnell, head of real estate for Taxand. "People are worried that they cannot afford to pay for their property if taxes go up."
As a result, investors are being turned off in Canada, the news provider explains. For example, in the Toronto market annual property taxes stand at one per cent while commercial properties are taxed at four per cent.