Ontario recently underwent a province-wide Assessment Update effective for the 2017 to 2020 taxation years. The new values are based on a legislated valuation date of January 1, 2016. The previous Assessment Update took place in 2012 and applied to the 2013 to 2016 taxation years. All property in Ontario is assessed by MPAC once every four years. The assessed value that is calculated by MPAC is intended to represent what a willing buyer would pay a willing seller for the property as of the legislated valuation date of January 1, 2016. The Ontario Government has a “phase-in” program whereby increases in market value are phased in over four years (2017-2020). Properties not subject to “phase in” are taxed at “full-CVA” taxation, which is simply Assessment x Tax Rate = Taxes. The full benefit of any decrease is applied immediately.

In short, yes.

We provide a comprehensive service that helps Ontario taxpayers reduce their property taxes. We are a firm of professionals licensed by the Law Society of Upper Canada. Through our knowledge of assessment law and property valuation, we are able to generate the maximum tax savings on your behalf. Market values have been increasing across Ontario for several years. Most property owners have seen increases on the Property Assessment Notices they received from MPAC. In some cases, the information that MPAC maintains on your property may be out of date or incorrect. We will verify all the information that MPAC has on file for your property and obtain a Property Profile Report. We will also compare your assessment to similar sold and unsold properties in your area to determine whether your value is accurate and equitable.

There are five major factors that account for 85% of residential property value:

  • Location
  • Living Area
  • Lot Dimensions
  • Age of the Property
  • Quality of Construction

Some other features that may affect value include: finished basements, garages, pools, number of bathrooms, and the type of heating and air conditioning. Site features can also increase or decrease the assessed value of your property, such as traffic patterns, being situated on a corner lot, and proximity to a golf course, hydro corridor, railway or green space.

Commercial properties may be assessed using the cost approach or the direct comparison approach to derive current values.

For industrial properties, it is necessary to determine the replacement cost of buildings and structures, adjusted for depreciation, then adding the value of the land.

Tax capping was introduced to protect properties from large property tax increases as a result of implementing Current Value Assessment (CVA) in 1998. In order to capture the lost revenue from properties that are capped, sometimes a municipality must calculate a clawback rate that effectively results in withholding part of a property’s decrease due to reassessment. The Province passed legislation which was designed to protect commercial, industrial, and multi-residential properties from significant tax increases. In reality, what the program does is impose a “cap” of 10 per cent on assessment-related tax increases from one year to the next. This protection protects one class of property owners from paying the full amount of taxes based on their property’s assessed value. The protection for one class of property owners comes at the expense of other property owners.

To fund the revenue shortfall caused by capping increases on one class of property, municipalities must then withhold, or “clawback”, some or all of the reduction in property taxes which would otherwise be due to another class of property. Essentially, the municipality is funding one taxpayers’ property tax obligations at the expense of another. Sort of like a modern-day Robin Hood story, if you will – Robbing from the rich and giving to the poor. When there is a positive adjustment on a tax bill, this means that the property is receiving a clawback adjustment to increase the taxes above the level of full-CVA taxation (ratio > 1.00). The greater the clawback amount in percentage terms, the greater the prejudice. When a property undergoes a change in classification, this will cause the property to stop being subjected to clawback.

If there is neither a Tax Capping or Clawback Adjustment on a tax bill, this means the property has reached full-CVA taxation and will remain taxed in that manner, unless a change is implemented through an Assessment Appeal or Request for Reconsideration which has the effect of bringing the property back into a capped or clawback position. Understanding the details of when, and when not, to pursue assessment changes is crucial. We will investigate these issues thoroughly and correctly on your behalf to ensure your taxes are at the lowest level possible. We will make sure that you do not inadvertently accept a seemingly beneficial settlement that would ultimately provide short-term gain, and long-term pain. When a property undergoes a change in classification, this causees the property to be taxed at full-CVA taxation.

We provide services to our clients on a Contingency Fee basis. Unless we are able to generate tax savings for you, there are no fees payable at all. There is no risk to you in this process as we charge no fees whatsoever unless we successfully recover property tax savings on your behalf.

For example, a 10% reduction on an assessment of $1,000,000, would generate Total Tax Savings as follows:

Our fee is payable only after the reduction in assessment has been officially documented.  We charge a Contingency Fee equal to 40% of the Total Tax Savings achieved during the 2017-2020 phase-in period, plus HST.  Fees are payable annually, only after Final Tax Rates are established by the municipality. If the property is sold during the phase-in period, the contract shall be cancelled as of the sale date.