When Lower Property Taxes Cut the Rent: Varying the Reduction With an Ontario A4

Ontario law cuts rents automatically when a building's municipal property taxes drop by more than 2.49%, and the municipality works out the cut using a fixed formula. Form A4, filed with the Landlord and Tenant Board (LTB), is the way to say that formula got it wrong for a particular building. Either side can use it: a landlord who thinks the cut is too deep, or a tenant who thinks it is too shallow.

Key points

How the automatic reduction works

No one has to apply for this reduction. Under s. 131 of Ontario's Residential Tenancies Act, 2006 (RTA), a drop of more than 2.49% in a complex's municipal property tax lowers the lawful rent for each unit in the building. The lower rent kicks in on December 31 in the year the tax cut itself takes effect (O. Reg. 516/06, s. 41).

The size of the cut comes from a simple multiplication. The tax drop, as a percentage, is multiplied by 20% for a multi-residential class property and 15% for everything else. Buildings with seven or more units get a Notice of Rent Reduction from the municipality, sent to the landlord between June 1 and September 15 and to tenants between October 1 and December 15.

A worked example: suppose taxes on a multi-residential building fall by 10%. Multiply 10% by 20% and rents drop by 2%. A unit at $1,800 a month would fall by $36 to $1,764.

Section 132, together with O. Reg. 516/06, s. 42, gives landlords and tenants four grounds for asking the Board to change that figure. Those grounds are the four reasons printed on the form. The Board decides by order what the percentage reduction should be.

The A4 is off the table for anything the s. 6.1 exemption covers: buildings, additions and certain second units whose first residential occupancy came after November 15, 2018. Section 132 is one of the rules switched off for those units.

Which reason fits your situation

Reason 1 – charges left out. In the base year the municipality charged other amounts that it did not factor in. Special levies and user fees (garbage collection, for instance) can be counted. What never counts: fines, interest and penalties, inspection fees, repair charges (emergency or by-law), charges for capital work, and the cost of vital services.

Reason 2 – the 20% or 15% assumption does not match reality. Where the tax bill is really some other fraction of what the building earns in rent each year, the Board redoes the math with the actual revenue. Landlords whose tax bill is a smaller slice of revenue than the formula assumes are often the ones who gain from this.

Reason 3 – a mistake in the notice. The tax decrease or the rent reduction on the notice is simply wrong.

Reason 4 – taxes changed later. Something such as an appeal or reassessment pushed base-year taxes up or down after the notice went out, with that change landing before the March 31 that follows the year the cut took effect.

Wrong form if: you are a tenant seeking your own s. 133 reduction tied to lower municipal taxes and charges. That is Form T3, the tenant's Rent Reduction application. Rising taxes are a different story too: a landlord seeking an above-guideline increase files the L5 instead.

The deadline

File no later than whichever is later of these two dates:

1. 90 days after you received the Notice of Rent Reduction. Buildings under seven units get no such notice, so for them the clock starts on the issue date of the tax notice that lowered the taxes.
2. March 31 in the calendar year that follows the reduction's effective year (O. Reg. 516/06, s. 42(2)).

There is a small wording gap to watch. The form and instructions start the 90 days when the notice was "issued"; the regulation starts them when you were "given" it. Use the earlier of the two.

Example. Say a rent cut is effective December 31, 2026, and a tenant gets the notice on October 15, 2026. Day 90 is January 13, 2027. The other date is March 31, 2027. Since that one is later, it is the deadline.

No extensions. The time limit comes from a regulation, and the Board cannot extend prescribed time requirements. Nor does s. 132 appear among the applications RTA s. 190 lets the Board give more time for. Mailing adds risk: under Rule 4.8 a mailed application is filed on the fifth non-holiday day after it goes in the post.

Serving the application. Rule 5.2 lets the Board make you responsible for service. A written hearing gives you 20 days from the Board's notice (Rule 5.6); an oral hearing means service a minimum of 30 days before the date (Rule 5.7). Five days after serving, the Certificate of Service is due (Rule 5.15).

Filling in the A4

You need version 01/04/2022. Every applicant completes Parts 1, 2, 3 and 5. Part 4 is added when you rely on Reason 2 or want revenue taken into account. Use capital letters, typed or printed. The A4 instructions go through it line by line.

Part 1 – General information

• Applicant. Shade the box that describes you, then give your name (or the company's), address, phone numbers and email.
• The property. Every building included needs its street address. Use an extra sheet if necessary.
• Other parties. A landlord applying for the whole building names one tenant here; the rest go, unit by unit, on a Schedule of Parties.
• Notice of Rent Reduction. Attach it if one was sent.
• Related applications. Give the file numbers of any that are still open.

Part 2 – Municipal property taxes

Fill in two years. The base year is the calendar year the rent reduction takes effect, which is also the year taxes fell. The reference year is the calendar year just before it. For each one, enter the complex's total property taxes. Count property and education taxes only; leave out user fees, penalties and special levies. Attach tax bills or equivalent proof for both years.

Part 3 – Your reasons

Shade all that apply, then:

• Reason 1: give total other charges for both years and attach proof.
• Reason 2: indicate the tax class (multi-residential or not) and complete Part 4.
• Reason 3: describe the mistake, explain why it is one, state the percentage you think is right, and show your math.
• Reason 4: include the document that changed the base-year taxes, for instance an appeal ruling.

Part 4 – Rent revenue

Enter the complex's total annual rent revenue for the base year. For Reason 2 this is not optional: according to the instructions, a Reason 2 claim cannot be considered if this part is blank. Have rent records ready as proof (O. Reg. 516/06, s. 44).

Part 5 – Signature

Shade the box for the applicant or the representative, then sign and date. Representatives also add their Law Society number and contact information.

Sending it in

• By email. First pay online; Visa and Mastercard debit or credit are accepted. Then, inside 24 hours, send everything (form, notice, supporting proof and payment receipt) to [email protected], with the property address and receipt number as the subject.
• By mail or courier. Enclose a money order or certified cheque payable to the "Minister of Finance", or pay by card on the Credit Card Payment Form.
• In person. Bring it to a ServiceOntario centre that handles LTB filings.

The fee is $201 for a landlord and $53 for a tenant, and it is not refunded. Details are on the LTB fees page. If you cannot afford it, look at the Fee Waiver Request.

Where A4 applications go wrong

1. Filing late. A regulation sets the deadline and nobody can stretch it.
2. Reason 2 with Part 4 blank. The revenue figure is the whole basis of that ground; leave it out and the claim cannot be considered.
3. Thin evidence. Section 44 of the regulation wants tax proof for each year, charge proof for Reason 1, rent proof for Reason 2, and a copy of any notice.
4. Counting charges that are excluded. Anything s. 41(2) carves out (interest, penalties, repair and inspection charges, capital-work charges, vital-service costs) poisons the numbers if included.
5. Leaving tenants off. Notice and any directed service flow from the Schedule of Parties. An unnamed, unserved tenant never learned of the case, and Rule 5.17 allows an adjournment or dismissal when service is defective.
6. Charging the old rent while you wait. Section 131(2) makes the cut effective by law, notice or no notice. Keep billing the old amount before a variation order and you invite tenant claims for illegally collected money.

For tenants on the receiving end

A landlord's A4 makes you a party. Look hard at the tax and revenue figures, watch for excluded charges, and bring any problems to the hearing. The automatic reduction governs your rent until an order says otherwise.

After filing

Rule 5.6 allows the Board to decide an A4 on paper. Should a notice of written hearing arrive, you have 20 days to serve it; otherwise, show up to the oral hearing. The Board's order sets the percentage and reaches back to the s. 131 effective date (s. 132(4)), so rents get adjusted and overpayments refunded or credited. For orders dated July 1, 2026 or later, anyone wanting a review has 15 days to ask (Rule 26.5).

Questions people ask

What size of tax drop lowers rent in Ontario?

More than 2.49% off the complex's municipal property tax. No application is needed, and the lower rent starts December 31 in the year the tax change takes effect.

What is the formula for the rent cut?

Multiply the percentage drop in taxes by 20% for a multi-residential class property, or by 15% for any other. Reason 2 on the A4 asks the Board to use the building's actual rent revenue instead of that assumption.

Does a four-unit building get a notice?

Not necessarily. The duty to send one applies only at seven units and up. Smaller buildings still get the rent cut, and their 90-day A4 window is measured from the tax notice.

Official sources

• Form A4 – Application to Vary the Amount of a Rent Reduction (PDF)
• A4 Instructions
• LTB Forms, filing and fees
• Residential Tenancies Act, 2006, ss. 131–132
• O. Reg. 516/06 (General), ss. 41–44
• LTB Rules of Procedure