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Appealing Your Property Taxes In Ontario

Property taxes are a significant cost of running your rental properties or your primary residence.  There is no reason to assume that the your property has been assessed fairly. If you feel that the assessment is too hight, then you have a duty to appeal your property taxes in Ontario. In the case of rental properties of more than 7 units, your property taxes will be significantly higher. (One candidate for city council in Toronto Ward 29 has made this an election issue.) Hence, it is  your duty to ensure that you become aware of what they are  and consider whether they are fair.

Understanding property taxes begins with an understanding of the Ontario Assessment Act and any regulations made pursuant to it.

At the risk of oversimplification – here is how it all works:

– S. 19 of  the Assessment Act requires that all property in Ontario be assessed at  “current value” (which in theory is  what  it  should  sell for). The final property tax assessment will then be “based on the current value”.  Note that “based on” is note the same thing as equal to!;
– MPAC (The Municipal Property Assessment Corporation) assesses the “current value” for specified valuation dates (the most recent valuation date was January 1, 2008). The  “assessed value” for January  1, 2008 will be the basis for property taxes for 2009 until  the next valuation date;
– The City will use a multiplier of that valuation to determine  the amount of taxes payable.

The  Process Of Appealing Your Taxes

Once again, at the risk  of oversimplification:

– if you don’t agree with the value that MPAC puts  on your property you should:
– First, file  a “Request  For Reconsideration”;
– Second, if you don’t agree with the results of the “Request For  Reconsideration” then you file an appeal to the “Assessment Review Board”;
– Third, if you are still not  satisfied then you MAY be able to appeal to a court.

The  point is that your research and “heavy lifting” must be done on the level of the Request For Reconsideration and Appeal  to the Assessment Review  Board.

S. 44 of the Assessment Act makes  it clear that  your property must be assessed in proportion to  “similar properties in the vicinity.” This makes it possible to argue that the “assessed value” of the land may be less than the actual purchase price. I know of at least one example of a case where the owner of a property was able to successfully argue that the “assessed value” should be approximately ten percent less than the price actually paid for the property. But, making this argument successfully will probably require the services of a good lawyer.

Negotiating With  MPAC

You will probably have the opportunity  to negotiate  with MPAC prior to an appeal  to the Assessment Review Board. If  you are  confident  of your case, then you should stay firm  in your  position. Remember, MPAC does  not  want your case to go  to the Assessment Review Board.

Property Tax Appeal  Consulting

Landlord Relief can provide you with assistance and consulting services  on  how  to best  deal  with your tax situation.

Relevant Sections Of  The Assessment Act

Assessment based on current value

19. (1) The assessment of land shall be based on its current value. 1997, c. 5, s. 12; 2007, c. 7, Sched. 1, s. 3.

Burden of proof

40.(17) For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation. 2008, c. 7, Sched. A, s. 11.

Assessment may be open upon appeal

44. (1) Upon an appeal on any ground against an assessment, the Assessment Review Board or court, as the case may be, may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or persons who should be assessed therefor may be placed upon the roll, and if necessary the assessment roll, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal. R.S.O. 1990, c. A.31, s. 44 (1); 1997, c. 5, s. 29 (1); 2006, c. 33, Sched. A, s. 34.

Reference to similar lands in vicinity

(2) For taxation years before 2009, in determining the value at which any land shall be assessed, reference shall be had to the value at which similar lands in the vicinity are assessed. 2008, c. 7, Sched. A, s. 13.

Same, 2009 and subsequent years

(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land. 2008, c. 7, Sched. A, s. 13.