1. What is the Property Tax?: A complex, and sometimes confusing system, property taxes provide cities with the dollars they need to deliver the programs and services residents depend on each day. The property tax system is based on the age-old practice of collecting taxes based on property values.
2. What is the role of Municipalities in collecting Property Tax?: Municipalities set municipal tax rates depending on how much money they require to provide local services such as fire fighting, garbage collection and snow removal. Municipalities set a tax rate for each property class e.g. residential, commercial and industrial. The tax paid by a property owner is calculated by multiplying the applicable tax rate by the assess value of the property.
For example: Assessed Value($100,000) x Tax Rate (.0195) = Tax Payable ($1,950)
3. Property Tax Bill is based on three things?: Your property tax bill is based on three things:
Understanding these three components can help you understand your bill.
4. What is Property Assessment Valuation?: Assessment values are intended to reflect a property's value and its use. To test your assessment, ask yourself if you could have sold your property on January 1 of the given year for its assessed value.
Farmland values are based on farmer to farmer sales, as opposed to, for example, a farmer to developer sale. Farmland valuation is based on different classes of land: higher land class reflects higher value and agricultural capability (i.e. class 1 agricultural land vs. class 4).
An assessment increase does not necessarily mean your taxes will increase. The amount by which your property taxes may change will not be known until the tax rates have been set and municipal tax policy options have been determined for the taxation year.
The Municipal Property Assessment Corporation (MPAC) is responsible for classifying and assessing all properties in Ontario. If you are concerned about your assessment, you can contact MPAC at 1-866-296-6722.
5. What is Property Class?: Land and farm buildings may be eligible for the Farm Property Class. The farm residence and one acre of land surrounding is normally part of the Residential Property Class.
If your assessment notice from MPAC reads 'Farm Taxable', this means the property is eligible for the Farm Property Class and associated tax rate. 'Residential Taxable' indicates the property is eligible for the Residential Property Class and associated tax rate. Other categories include commercial, industrial, and managed forest.
For your property to be eligible for the Farm Property Class Tax Program, or 'Farm Taxable' category, you and your farm operation must meet several criteria. These include farm assessment, a minimum farm income level, a valid Farm Business Registration (FBR) number, and citizenship. According to the Farm Registration and Farm Organizations Act, a valid farm business must gross at least $7,000 in reported income. FBR numbers are issued by Agricorp. If you or the farmer who rents, leases or uses your property requires an FBR number, contact Agricorp at 1-866-327-3678.
Prior to 2000, farm property owners made yearly application to OMAFRA's Farm Property Class Tax Program. Since then a multi-year application has been used. Although this makes it more convenient, it puts the responsibility on the property owner to report any changes to the associated FBR (i.e. change in ownership, change in renter etc). To report changes or make a request for reconsideration contact OMAFRA's Farm Property Class Tax Rate Program at: 1-800-469-2285.
When a property is sold or transferred, or if a farmer does not renew his/her FBR number, the FBR number will no longer be valid. FBR numbers are renewed through Agricorp (1-866-327-3678). The FBR renewal fee is directed to one of the general farm organizations: the Ontario Federation of Agriculture, Christian Farmers Federation of Ontario or National Farmers Union - Ontario.
6. What is Tax Rates: Tax rate (formerly known as mill rates) are set by municipal governments to pay for local services. Property class tax rates are set by municipally elected officials. The Farm Property Class tax rate is normally 25 per cent of the municipal residential rate. Education tax rates are set by the provincial government, which is also normally 25 per cent of the municipal residential rate. Taxes are collected by your municipal government.
Tax bills are typically mailed out twice per year. Each municipal government may have different payment/reimbursement policies when dealing with changes to assessments and property tax categories. If you have questions regarding your tax bill (not MPAC notice of assessment) contact your municipal government office. Phone numbers can be found in the blue pages of your phone book under 'Taxes'.
We hope this information helps to explain your property tax bill, as well as whom you can call if you have questions about your bill.
7. How does it work?: The process begins by determining each property's assessed value. The Municipal Property Assessment Corporation (MPAC) does this for the entire province of Ontario. Each property is assessed at its market value. Property values are then supplied to municipalities on annual assessment rolls. Municipalities complete the process by applying the appropriate tax rate to the assessed value of the property. Tax rates are determined annually in each municipality, and differ between for the various tax classes (i.e., residential, industrial, commercial, etc.)
Even though municipalities collect taxes on behalf of the Province, they only keep one portion for themselves. In Ottawa, the City keeps about two thirds of your property tax bill for municipal services and about one third is put aside for the Province either for education or for provincially mandated programs such as welfare, social assistance and affordable housing.
8. What is MPAC (MUNICIPAL PROPERTY ASSESSMENT CORPORATION)?: The Municipal Property Assessment Corporation (MPAC) is responsible for carrying out property assessments in Ontario. After each reassessment, MPAC sends property owners a Property Assessment Notice that shows the current value of the property as of the valuation date. MPAC provides municipalities with the same information consolidated in a document known as the assessment roll. Municipalities use this information to calculate property taxes.
After property owners have received their Property Assessment Notices, they may request that MPAC reconsider the assessed value of their property, if they believe it is incorrect. The procedure for requesting this reconsideration is described on the Property Assessment Notice itself. If MPAC agrees to change the assessment as a result of the reconsideration, there is no need to file a complaint with the ARB. However, if MPAC does not agree to change the assessment before the cutoff date for filing complaints with the ARB (June 30, 2006 for the 2006 taxation year) a complaint may be filed with the ARB along with payment of the applicable filing fee (see Required Fees).
9. What is ARB (ASSESSMENT REVIEW BOARD)?: The ARB is an independent administrative tribunal whose main function is to hear complaints from people who believe that properties are incorrectly assessed or classified. The Board also deals with complaints about other matters such as school support designation and some property tax appeals. The Board holds hearings across the province. During a hearing, persons who have made complaints to the Board, or their representatives, have an opportunity to explain their positions. While persons may choose to have a representative accompany them at the hearing, or to act on their behalf, this is not required.
If the complaint involves the assessed value of the property, the Municipal Property Assessment Corporation (MPAC) will be represented at the hearing to explain how the assessed value of the property was determined. Other parties may also appear at the hearing, including representatives of the municipality and the property owner, if different from the complainant. These hearings are open to the public and are generally informal.
The Board's jurisdiction and authority are defined by the Assessment Review Board Act, the Assessment Act, the Municipal Act, the Education Act, and the Statutory Powers Procedure Act. Complete texts of the related legislation and regulations can be found at www.gov.on.ca/MBS/english/publications.
10. What is “Interim” Tax rate/Bill?
Your Interim Property Tax Bill is based on 50 per cent of previous year’s annualized taxes.
11. How do interpret my property assessment notice?
You should contact MPAC to confirm, but in general, the property assessment notice will confirm two things:
Assessment notices are issued by MPAC late in the year in advance of the tax year.
12. How do I file an appeal?
If there appears to be an error with the current value assessment (either the dollar value is wrong or there is a suspicion that the property is assessed as something other than a farm) you should contact your regional assessment office (MPAC) or file a complaint directly with the Assessment Review Board. Contact:
13. I have received my 2007 tax year assessment notice and I think that I am being taxed at the 100% rate rather than the 25%, what should I do?
If there appears to be a problem with the ‘tax rate’ and the property is not in the farm property class you can call OMAFRA or file a written appeal directly to the Assessment Review Board.
14. Who do I contact if I have additional questions?
If you have questions regarding the Farm Property Class Tax Rate program please contact:
15. How to pay the Property Taxes? There are many different ways to pay your property taxes:
16. Financial Institutions You can pay your property tax bill at most financial institutions. There may be a charge for this service.
17. Pre-Authorized Tax Payment Program Pay your current tax bill by completing and signing the pre-authorized form. Supplementary/Omitted tax bills and bills for other charges must be paid separately and pre-authorized plan does not work for such payments.
