Ontario property taxpayers have been promised more and easier input into the next province-wide reassessment. The recently released Ontario budget announced that the base date for pegging property values will be moved one year forward, to January 1, 2019, to give the Municipal Property Assessment Corporation (MPAC) more time to consult and potentially adjust valuations before a new four-year assessment cycle begins in 2021.
This advance disclosure framework was actually introduced during MPAC’s previous provincial valuation exercise in 2016, but, generally, only fairly large commercial and multi-residential landlords got the opportunity to see and dispute the numbers before finalized property assessment notices were mailed out. An earlier start is meant to support what the budget calls a “meaningful and open exchange of information among MPAC, property owners and municipalities”. As part of that, MPAC is also reviewing how it gathers data about building revenue and operating costs, which underpins commercial and multi-residential valuations.
“Our hope is that the longer gap (before values are finalized) will enable all of us to have better, more accurate assessments. We were also pleased with the announcement that MPAC is working on making it less onerous to submit information,” says Dean Karakasis, executive director of the Building Owners and Managers Association (BOMA) of Ottawa, which has been part of a working group providing MPAC with stakeholder feedback. “Taking those two things in tandem, we would say that’s a good outcome.”
Nevertheless, industry insiders caution it could take awhile to work through some bottlenecks in the process. The launch of a new four-year cycle in 2017 spurred a wave of assessment appeals as property owners reacted to often dramatic increases in value over the previous assessment, which had been based on the property value as of January 1, 2012. Compounding that, a new timetable for appealing to Ontario’s Assessment Review Board (ARB) was introduced last year.
“The problem we are going run into in many cases is there is not going to be a conclusion of the 2016 appeals before the baseline of 2019,” predicts David Gibson, a director with Yeoman & Company Paralegal Professional Corporation. “It may get complicated just because of the large volume of appeals that will likely still be before the board.”
While the new schedule stretches the time available for disclosure and discussion, assessors and ratepayers now face a tighter deadline for initial evaluations. “By the time we get into mid-year 2019, MPAC is going to be very busy with appeals arising from the fact there were effectively no ARB hearings during the 2017 calendar year due to introduction of the new board rules,” Gibson observes.
He favours more frequent assessments, such as in British Columbia where they occur annually. Or, if that would be too labour-intensive across Ontario’s approximately 5.4 million properties, a two-year interval should still deliver more consistent values from one property assessment to the next.
“The huge swings we’re seeing in assessed value may be right, but owners put them under appeal just because they’re so extreme,” Gibson says. “I don’t think we’re solving that by moving the baseline date.”
A city of Toronto report confirms that commercial property values increased 33.6 per cent, on average, between the 2012 and 2016 assessments, while average multi-residential values climbed an even more startling 54.4 per cent. “Individual properties, particularly those located in high-demand areas or in redevelopment areas (e.g., Yonge Street) saw assessment increases far in excess of the average,” the report states.
In Ottawa, Karakasis has heard no notable outcry for more frequent reassessment, but acknowledges there could be some benefits.
“I think the first step is to make it less onerous to comply with MPAC’s requirements. Right now, we’re okay with the timing,” he says. “Sometimes, though, a building goes down in value, and you don’t want to be caught mid-cycle having to jump through hoops to make the point.”
Barbara Carss is editor-in-chief of Canadian Property Management.