PERTH COUNTY – Anne Haines, regional manager zone one for the Municipal Property Assessment Corporation (MPAC), made a presentation on Oct. 21 allowing county council members a chance to voice concerns residents have had regarding property values and taxation.
“If you own a house in Ontario, your local municipal council determines its budget and sets the tax rate annually and taxes are based on the rates set by councils,” she said. “Our assessments are used, multiplied by the tax rate and the bill is levied from there. So if an owner has a question on their actual property tax we ask them to speak with the municipality. If an owner has a question about their home’s property assessment or the valuation we arrived at we ask them to get in touch with MPAC.”
The last assessment update that was prescribed was Jan. 1, 2016. That was the valuation date set by the province.
“The assessment updates and the cycle are all set by the province so we were scheduled to conduct an assessment update in 2020 (which would have occurred in 2021) but it was postponed due to the COVID-19 pandemic,” said Haines.
As part of the provincial spring budget, the Minister of Finance, Peter Bethlenfalvy, announced a decision to further postpone the assessment update because of the pandemic.
“This means for our property owners that your valuation this year and next year will continue to be based on that valuation date of Jan. 1 2016,” said Haines. “I also want to just talk about the relationship between property taxes and valuation briefly. A question that we are continually asked (is) what is going to be the impact in our communities moving from a 2016 market, really to anything since the pandemic hit.”
Haines said it’s important to note for anyone who is asking these questions that an increase in assessed value does not necessarily mean higher property taxes when they are updating everyone in an assessment.
“The most important factor to focus on and recall is it is not how much your assessed value has changed,” she said. “But, how it has changed relative to the average increase within your municipality and your property type so depending on your market and the shifts and the buyers and sellers and what they are willing to pay you could see no change in tax, a decrease in tax or a tax increase.”
Haines said property owners can find information on this relationship in a video on www.MPAC.ca.
“We have the 5.4 million properties… 4.9 million… or 90 per cent of the properties in the province are residential,” she said. “Collectively all the assessments in the province total $3 trillion and generate $30 billion annually in taxes.”
In Perth County, there is a $12.1 billion assessment total from 17,747 properties.
“We have a different mix – the provincial lens majority was residential, your property makeup is predominantly farm,” said Haines.
Coun. Todd Kasenberg said he had many questions but narrowed it down to a few priority questions at the meeting.
“Let’s say there is a new home built in Listowel in 2019. What is the process for assessment of that home?” he asked. “How do you generate the assessed value and how do you project the value for the next year… because of the government’s policy on freezing the assessment.”
Haines said the number one thing they rely on is building permit details from the municipality, so MPAC partners municipal staff to receive that data for Listowel.
“We assess the property and as mentioned all values are as of Jan. 1 2016,” she said. “So even though we’re in your example of 2020 and the permit was taken out in 2019 every property in Ontario is backdated … as of that point in time Jan. 1, 2016 … Then what we would do is measure the house, inspect the house … key the data, do a supplementary assessment, a notice to the owner, a notice to the municipality … and then ultimately the assessment roll is returned to the municipality year.”
Coun. Doug Eidt asked if a farm sells for $3.5 million does it get taxed at the 2016 value or the purchase price.
Haines said it gets taxed on the 2016 values which were determined by sales from 2014 to 2016.
“That’s why I talked about the relationship between tax and assessment so nobody would get too panicked,” she said.
Deputy Warden Rhonda Ehgoetz asked why farms automatically revert to residential after purchase and the new owner has to apply to have it designated farmland.
“In the meantime when that is going on the owner is paying taxes on residential,” she said. “Then the municipality has to rebate them and that seems to cause an accounting nightmare for our municipalities, so why is that?”
“I completely hear what you are saying,” said Jeremy Gough, MPAC account manager for Perth County. “I come from a farm background as well so I can appreciate the frustration.
“The important thing to note is that the farm program is a tax incentive program that is not exclusive to MPAC. It’s external so farmers have to prove their status and be bona fide farmers through Agricorp.”
That list is then provided to MPAC so when a property sells and a new owner is supplied MPAC has no idea if that new owner has been granted their status from Agricorp until they receive an update.
Warden James Aitcheson added that currently in agriculture there is more consolidation than new purchasers, so he asked why there isn’t a computer system tracking purchases by bona fide farmers.
“That may be the case,” said Gough. “If you already have your exemption as soon as that listing is provided to us it may be a quick flip… so it’s not always a lengthy process. I have seen where it has been very quick.”
Aitcheson said he was extremely disappointed when he saw that there still would not be any new assessments until after 2022.
“As you noted in your presentation we are predominantly agriculture so in 2016 the shift in taxes really shifted to agriculture,” he said. “So we’ve all seen what’s gone on in the housing industry… Most predominantly in the last two years… The price of homes has virtually doubled and I realize the sale price doesn’t necessarily reflect the assessed value but I can’t honestly believe for the life of me that the assessed value is not going to increase sharply and I realize this wasn’t your call to put it off… but that is going to cause the greatest myriad of problems when this new assessment starts to come in. Between staff and MPAC they are going to be swamped with appeals or enquiries… and I truly do believe that’s just a complete injustice to not deal with this a little sooner than what we are looking at here so you can pass that on to the provincial counterparts for me if you don’t mind.”
“I appreciate the concern and if I can just go back to the relationship of assessment and taxation,” said Haines.
“It’s really important to hang on to the fact that it’s where you fit in relation to the average because everybody is going to go up, no question.”
Coun. Daryl Herlick said he was blown away when he heard the process was being prolonged.
“I almost think this council should consider drafting a letter,” he said.
Coun. Walter McKenzie said he fails to see why the province is “kicking this down the road because it’s just going to snowball.”
“You think we have problems now, I know in my particular municipality the farmers are always complaining about their assessment being too high,” he said. “It’s not going to be anything like when 90 per cent of the residents blow up and they start to complain.”
“They paused it due to the pandemic,” said Haines. “That’s what we were told. They paused it to do consultations. They’ve heard from some municipalities across the province. Again that’s in their purview… Hopefully we’ll get some answers in the fall economic statement.”
“My one message here is don’t shoot the messenger,” said Aitcheson. “She’s just telling us what she’s been told.”
Colin Burrowes, Local Journalism Initiative Reporter, Listowel Banner