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.

Keep watch for your notice of assessment. MPAC is mailing them out over a 10- to 12-week period starting in early to mid-September 2008. You’ll notice that it is more detailed than your last one. For one thing, it will include your previous assessed value so that you can tell at a glance how your assessment has changed.

If you haven’t already done so, register on the MPAC website for AboutMyProperty, which will give you access to a more detailed profile report on your property, plus those of your neighbours for comparison. You’ll be able to see the selling price of properties that have changed hands since they were last assessed, and the variables that MPAC used in their current assessment. The report will list such details as the square footage of the buildings, the water frontage, and whether a property is road or water access. Take note of any details about your own property that are incorrect—the report lists a garage, for example, and the garage has been torn down—then get on the phone to MPAC and ask for a correction. Simple adjustments can be made over the phone until the end of November, Hummel says.

But if, after studying your own and your neighbours’ assessments, you feel MPAC has set your property’s value too high, then you should file a request for reconsideration. (Call 866-296-6722 for the form or download it online.) This request must be filed by March 31, 2009. In a change from previous years, you must file a request before you will be allowed to appeal. No request, no appeal. Since municipalities don’t set their tax rates and budgets until later in the spring, after they get the assessments, your request needs to happen before you even know how your assessment will impact your municipal taxes. Include in your request any information you think will support your case. This might be appraisal reports, photographs, or insurance inspection reports. “Make the job easy for the assessor to correct the value,” Hummel says.

MPAC will send you back a response. If it adjusts your assessment and you accept the adjustment, then you will be required to sign a binding agreement to that effect; however, if you don’t agree or if it won’t adjust your assessment, you will need to file an appeal to the Assessment Review Board (ARB) within 90 days of receiving the response. You will then be sent a notice of when your appeal hearing will be held. The ARB, a provincial tribunal set up to hear property-assessment appeals, conducts hearings across Ontario. Submissions to include in your appeal are similar to what you prepared for the request for reconsideration. The vast majority of property owners choose to represent themselves at appeal hearings because potential tax savings generally aren’t high enough to justify paying for professional help. An adjustment of $50,000 at a tax rate of one per cent, for example, is a savings of only $500.

Appeal rules have changed, too: Now the onus is on MPAC to establish that it has done a correct assessment. Seven days before a hearing, the corporation is required to share its case, including the comparables it used to justify the assessment, in a letter to the property owner. At a hearing, which will typ-ically be in front of a single ARB panel member, the MPAC representative will present its case first. The property owner should be prepared to present any evidence that refutes that of MPAC and be ready to ask questions about the other side’s case. Again, photographs and other materials that make the case for a lower assessment are helpful. In most cases, the ARB panel member will give his or her decision on the spot and make any assessment adjustments immediately. Any reduction that is applied to the current value is carried forward to the next taxation year or, if it is not, MPAC is required to explain why on the next assessment notice.

One seasoned cottager who is looking forward to the new disclosure rules is retired lawyer Robert Bombier, who owns a log building on Lake of Bays near Dwight, Ont. He has appealed his cottage assessments more than a dozen times, so he’s familiar with the old system, in which property owners had to fight for every shred of information to understand their assessment. “Now you’re entitled to full disclosure from MPAC,” he says. “But the onus is still on the owner to demand it. If you don’t ask, you don’t find out.”

Bombier had his first run-in with MPAC after the ARB awarded him a 15 per cent nuisance reduction for abutting Nor’Loch Lodge several years ago. But MPAC didn’t apply the board’s decision to his assessment in subsequent years, forcing Bombier to appeal again and again. Since then, he has also appealed because MPAC made errors in the size of his frontage and acreage, and he’s been successful each time.

In 2005, Bombier noticed a log premium of more than $100,000 on his property-profile report. He requested evidence from MPAC that log construction is more expensive and therefore of higher value and, when he didn’t receive a response, he did his own research. A log-home builder wrote a detailed letter on Bombier’s behalf that said “a log home is no more costly to build than a custom-built frame home using high-quality material,” and that there should be no assessed log premium. The board was convinced and reduced Bombier’s assessment for the 2006 and 2007 tax years from $737,000 to $615,000. “You still have to be vigilant,” he says, resignedly.

This article was originally published on October 21, 2008

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