As property taxation continues to increase over time, land owners are becoming more and more concerned about property assessments and looking at the appeal process for solutions. Generally, two areas of disagreement and options to obtain relief regarding property taxation are:
1. The land owner may believe that a property should be exempt from municipal taxation. Assessment and taxation are applicable to all real estate in Ontario subject to certain exemptions. There are, however, certain qualifications to granting exemptions which are within the discretion of a court to grant. Specifically, an application for exemption must be made to the Superior Court of Justice but the court order is not retroactive; it only applies to the year in which the application is made and future years. Thus, it is recommended such an application be started as soon as possible after the problem is recognized and before December 31 of the year in question.
2. As property taxation is based upon the assessed value and classification of the property, a land owner may seek tax relief by appealing the assessment to the Assessment Review Board (ARB). These appeals are governed by strict deadlines which, if missed, will prevent the taxpayer from obtaining relief for that taxation year but is available for application the next year. The ARB also hears appeals of assessments in non-municipal territories.
In appealing an assessment, the first step is to determine how it was produced which information may be within the knowledge of the tax payer or obtained from the Municipal Property Assessment Corporation (MPAC). For residential properties, this may have been accomplished by an inspection of the property or statistical approach known as Multiple Regression Analysis (MRA) based upon sales of residential properties in a local area, especially for similar properties to that of the property whose assessment is being appealed. In urban areas, where a group of properties are similar, this may achieve reasonably accurate results if the characteristics of the residence and the land on which it is located have been taken into account. It is much more difficult to get “accurate” results where the property is located in cottage or rural area or if the property is unique in size or lot dimensions. It is worthwhile to note that “land” includes more than just the land. It includes what is on the land such as structures, buildings and trees and includes land that is covered with water.
There are different methodologies used to assess other property types. For example, multi-residential or commercial properties are often valued using an income approach and industrial properties are often valued on a cost basis. It is therefore wise to consult with experienced appraisers who have sound appraisal credentials or are realtors or valuators. If the classification of the property is at issue, one should also review the general assessment regulation that outlines what properties are included in a particular class.
So what can be appealed? Relevant legislation indicates that areas of dispute may be the value, whether the proper person was assessed, school support, classification of the land and where properties contain different classes, the value of each class of the property. The appeal is launched by filing of the complaint in the requisite ARB form and payment of the filing fee. The complaint can be e-filed, faxed or delivered in person. It is recommended that appellants contact MPAC to obtain information on comparable properties and Guidelines for the Release of Assessment Data (GRAD) reports. At time of writing, available GRAD reports include those with details about one’s property, requests for information, information for tenants, government bodies and municipalities and third parties.
At the commencement of a hearing, the MPAC representative identifies the property and outlines how the assessment was developed. The hearing then proceeds in a normal adversarial manner, including presentations of evidence and submissions by the appellant, MPAC and the municipality and cross-examinations.
If you would like advice on property assessments and/or the appeal process, please contact Andrea P. Kelly.
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Andrea Kelly, Lawyer, has extensive experience in wills, trusts, powers of attorney and estate administration matters. She provides clients with a high standard of timely professionalism and expertise, incorporating a very thorough fact finding process. This is quite often enlightening for her clients and facilitates individually tailored services. If you would like to know more, feel free to use the easy contact form or read Andrea’s bio.