New property tax exemption for affordable rental housing
The Ontario Government has created a new optional property subclass – the affordable rental housing subclass – for both the multi-residential and new multi-residential classes for 2026 and subsequent taxation years.
For the subclass to apply in 2026, an upper-tier or single‑tier municipality must have passed an adopting by-law by September 30, 2025. For subsequent years, by-laws can be passed at any time. Municipalities may then reduce the municipal property tax rate for eligible units by up to 35%.
MPAC will collect affordable rental housing information through its Assessment Information Request Program. Specifically, the information will be included as part of MPAC’s annual Property Income and Expense Return (PIER). Multi-residential property owners will be prompted with questions to support the collection of affordable rental housing eligibility. Where information is required, MPAC will send a letter to eligible property owners outlining submission requirements and deadline. Property owners are encouraged to submit the requested information online through the Assessment Information Request Portal in MPAC AboutMyProperty™.
How to determine property eligibility
The optional subclass may apply to eligible multi-residential units that meet the following criteria:
- be a housing unit in a property that has seven or more self-contained residential units;
- be subject to an agreement requiring the provision of affordable rental housing or required by regulation or statute to provide affordable rental housing;
- be an existing or newly built self-contained residential unit; and
- meet the requirements of the affordable rental unit in the Development Charges Act, 1997:
- rents are average or lesser than what is identified by the Minister of Municipal Affairs and Housing, and
- the tenant is acting independently of the landlord.
MPAC will use the annual bulletin of affordable rent thresholds that is published by the Ministry of Municipal Affairs and Housing (MMAH) to determine whether a unit is eligible as affordable rental housing. Rent-controlled units are not eligible for the affordable rental housing subclass.
Property owners are required to provide MPAC with the information needed to determine unit eligibility.
Based on the submissions from the data collection campaign, MPAC will review and assign a new Realty Tax Qualifier (RTQ) Taxable Subclass 2 (T2) combination to identify eligible properties in assessment products and mail Special Amended Notices in Fall 2026.
Need help or more information?
If you have questions or need additional guidance, please contact MPAC’s Customer Contact Centre. You can also learn more about the new property tax exemption for affordable rental housing by exploring the Frequently Asked Questions below. Expand each section for answers and helpful resources.
Frequently Asked Questions (FAQ)
For the affordable rental housing subclass to apply, a single-tier or upper-tier municipality must pass an adopting by-law. The optional subclass may apply to eligible multi-residential units that meet the following criteria:
- be a housing unit in a property that has seven or more self-contained residential units;
- be subject to an agreement requiring the provision of affordable rental housing or required by regulation or statute to provide affordable rental housing;
- be either an existing or newly built self-contained residential unit; and meet the requirements of the affordable rental unit in the Development Charges Act, 1997:
- rents are average or lesser than what is identified by the Minister of Municipal Affairs and Housing, and
- the tenant is acting independently of the landlord.
MPAC will use the annual bulletin of affordable rent thresholds that is published by the Ministry of Municipal Affairs and Housing (MMAH) to determine whether a unit is eligible as affordable rental housing. Rent-controlled units are not eligible for the affordable rental housing subclass.
The following municipalities have adopted the subclass to date:
- City of Ottawa
- Township of Seguin
- United Counties of Prescott & Russell
- City of Guelph
- Town of Espanola
- Municipality of Greenstone
- Halton Region
- Glengarry County
- County of Essex
- Municipality of St. Charles
Property owners are required to provide the requested information needed to determine eligibility through MPAC’s Property Income and Expense Return campaign.
MPAC will send information request letters to eligible properties to support the determination of eligibility for the new subclass.
MPAC will collect affordable rental housing information through its Assessment Information Request Program. Specifically, the information will be included as part of MPAC’s annual Property Income and Expense Return campaign. Multi-residential property owners will be prompted with questions to support the collection of affordable rental housing eligibility.
Property owners are encouraged to submit the requested information online through the Assessment Information Request Portal in MPAC MPAC AboutMyProperty™. Alternative submission methods are available, to learn more, visit mpac.ca/submit.
If the deadline to submit the requested information online through the Assessment Information Request Portal is missed, the property owner can still apply using hard copy forms and provide the information to MPAC.
As part of MPAC’s annual Assessment Information Request Program, MPAC sends a reminder letter to all property owners who have yet to comply. If the required information is not provided, the property will be removed from the affordable rental housing tax class for that year, as MPAC cannot confirm eligibility without the updated data.
Only the units that qualify benefit from the subclass reduction and not the entire building.
