Fighting your property assessment

By Christine LangloisChristine Langlois


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Jeff Peppin loved his modest cottage on Kawagama Lake in Haliburton. He bought it in 1997 when he was only 25, and over 10 years spiffed it up with paint, a new deck, and small repairs. By the time his two small kids were old enough to enjoy s’mores around the campfire, he had the place “just the way I wanted it,” he says. But when the taxes, which were $944 the year he bought, edged up to almost $3,000 in 2006 with no end in sight, Peppin and his wife realized they couldn’t keep going on their two middle-income salaries—he’s a building inspector for the Township of Perry and she’s a schoolteacher. So they made the wrenching decision to sell and eventually found another property on Restoule Lake, just south of North Bay in the unorganized township of Patterson. Now under provincial land-tax rules rather than a municipal tax system, their taxes are only about $700 and they feel protected from the next round of double-digit tax hikes they are sure is coming. They are growing attached to their new place but still miss the old cottage. “Would I have left voluntarily? No,” Peppin says.

Peppin’s story of moving cottages to escape high taxes is extreme, but increased taxes are becoming a contributing factor in more and more cottage sales, and they’re sure to be an issue when the Municipal Property Assessment Corporation (MPAC) releases updated property assessments in fall 2008. Values on Ontario waterfronts have climbed steadily in the three years since the provincial government froze property assessments while they revamped the system. This action followed a critical report from the provincial ombudsman. Many cottage owners will face substantial assessment increases, says Bob Topp, executive director of Waterfront Ratepayers After Fair Taxation (WRAFT).

Along with the Coalition After Property Tax Reform (CAPTR), which represents seniors and urban groups, not just waterfront ratepayers, WRAFT wants the provincial government to put a cap on property assessment increases and is circulating an online petition to that effect. A cap on assessment is the only way to prevent the wild volatility in the tax system, Topp says, noting that other jurisdictions in the US and Canada (Nova Scotia) have some form of cap in place. As Topp points out, the gains in value that cottage properties have made are unrealized gains, only available to cottagers if they sell. No one, he says, should be forced to sell a cottage because they can’t afford to pay the taxes. “My cottage is not an asset I have any interest in selling,” Topp says about the Lake Rosseau property that has been in his family for 60 years.

Rather than implementing a cap, the provincial Ministry of Finance has responded to the problem by changing the assessment cycle to every four years instead of every year, and then phasing in percentage increases in assessments over those four years. So if your cottage assessment goes up by 48 per cent, your assessed value will increase by 12 per cent every year for four years. Then your property will be reassessed.

Long-time cottage owners will be familiar with the property-assessment ritual. But if you’re new to the cottage-tax blame game—or you’ve forgotten the arcane rules and regulations since your last assessment (that’s okay, they’ve changed anyway)—here’s what you need to know to understand what will go down this fall when that innocuous-looking envelope from MPAC gets dropped into your mailbox.

Try not to panic—you do have options.

This article was originally published on October 21, 2008

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Christine Langlois