Ontario's Municipal Property Assessment Corporation (MPAC)
has completed its reassessment of all real property in Ontario
which will take effect on January 1, 2009.
There have been
legislative changes enacted by the Province affecting both business
and residential properties. This Advisory focuses on the changes
affecting business properties only.
The New Assessment Cycle
All real property in Ontario has been reassessed using a 2008
"base year". This new value will form the basis of the
assessed value of property for the taxation years 2009-2012
inclusive. Any increases in assessed value will be phased-in over
the next four years by 25% of the increase in value each year. In
other words, if the new assessed value of a property is $1,000,000
and the previous assessed value was $800,000, the assessed value of
the property will be $850,000 in 2009, $900,000 in 2010, $950,000
in 2011 and $1,000,000 in 2012.
Notices of Assessment have now been mailed to all property
owners. Your assessment notice will identify the increase in
assessed value for your property as well as the phase-in
As owners of business properties know, there has been a complex
system of property tax caps and clawbacks in place for many years
now. For the present time, capping of business property taxes
continues. However, some business properties are starting to come
out of the capping mechanism and the province has introduced
business education tax reductions for properties with new
construction. Business property owners should carefully review
their assessment notices and property tax bills and seek
professional advice to ensure they are minimizing their property
Appealing Your Assessment
On average, assessed values of business properties have
increased significantly, by a range of 20% to 50%. This means that,
even with the phasing-in of the increased assessed values, many
property owners may experience noticeable tax increases in the
More importantly, the increased assessed values returned by MPAC
may now be outdated in that they are based on the continuing
assumption that property values will escalate as they have been for
the past several years. Recent economic events and emerging trends
in the real estate market mean this assumption is most likely
incorrect. By the end of the four-year assessment cycle in 2012,
many business properties could well be substantially
We therefore recommend that all business property owners should
appeal their property's assessment. The deadline to do so is
March 31, 2009.
Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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