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The
Government of Ontario has made a number
of changes to the property assessment
system that went into effect in the 2009
property tax year. These changes include
the introduction of a four-year
assessment update cycle and a phase-in
of assessment increases.
Currently,
the assessed value of properties in
Ontario is based on a January 1, 2008
valuation date. MPAC’s last
province-wide assessment update took
place in 2008 and was based on a January
1, 2008 valuation date.
To provide
an additional level of property tax
stability and predictability, the market
increases in assessed value between 2005
and 2008 will be phased-in over four
years. The phase-in program does not
apply to decreases in assessed value.
Any market decrease in the value of a
property is applied immediately and
reflected on your most recent Property
Assessment Notice. The change in
assessed values and the phased-in
assessment values for the 2009 to 2012
property tax years are listed on the
2008 Notices. There is a difference
between the 2008 Current Value
Assessment (CVA) (the destination value)
and the current year’s phase-in value.
The current year (which can be 2009,
2010, 2011 or 2012 taxation year)
phase-in value is the assessed amount
that the municipalities or the local tax
authorities use to calculate the annual
property taxes. An example of this is as
follows:
Current year
(2010) Phase-in CVA=$250,000
Total
Municipal Tax Rate= 1 %
Total
Municipal Tax burden = $250,000 x 1 %=
$2,500.
The 2008 CVA
is not used until 2012 since this is the
destination value.
The
municipalities/local taxing authorities
set property tax rates and the province
sets the education tax rate. MPAC’s
assessed values are used to determine
these taxes.
How MPAC
Assesses Properties
MPAC’s
mandated role is to accurately value and
classify all Ontario properties in
compliance with the Assessment Act and
related regulations. To establish a
property’s assessed value, MPAC analyzes
property sales in a community to
determine the CVA. This method is used
by most assessment jurisdictions in
Canada and throughout the world. When
assessing a residential property, we
look at all of the key features that
affect market value. Five major factors
usually account for 85% of the value:
location; lot dimensions; living area;
age of the structure(s), adjusted for
any major renovations or additions; and
quality of construction. Examples of
other features that may affect a
property’s value include: number of
bathrooms; fireplaces; finished
basements; garages and pools. 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.
For more
information on how MPAC assesses
property visit www.mpac.ca
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