Toronto Introduces Property-Tied Energy Efficiency Loans
Homeowners Can Get Loans of Up to 5 Percent of the Assessed Value of Their Homes
TORONTO — The city of Toronto recently piloted a program that will allow residents in certain designated neighborhoods to get city-financed loans to improve their homes’ energy and water efficiency.
For now, the program only has funding of $20 million from city reserve accounts. Homeowners can get loans of up to 5 percent of the assessed value of their homes and to qualify, the home must be evaluated by a certified energy advisor. Loans of up to 15 years at 4.25 percent are available and loan repayments are made via the property tax bill. What is most unique about this program, however, is that the loan is attached to the property, so it is transferred to the new owner if the house is sold. This feature removes the often-cited disincentive to investing in energy efficiency improvements that homeowners often feel if they are uncertain about whether they will live in a home long enough to reap the benefits of such investment.
The program is being run alongside a similar incentive program being run by Enbridge Gas Distribution. Pending the results of this pilot, the city of Toronto would like to take the program city-wide. Ontario legislation now exists to allow this type of property tax-related financing in any municipality so there is a possibility that other municipalities will follow suit.
Publication date: 4/7/2014