Property Taxation and MPAC Assessment

FOCA advocates for fair property taxation on behalf of waterfront residential property taxpayers in Ontario.

“Downloading” by the Province onto municipalities, and hence property owners, is higher in Ontario than all the rest of Canada. This inordinate local funding burden amplifies the unfairness inherent when property value is the sole determinant of how much an individual who pays for a lengthy list of municipal obligations. FOCA believes the provincial government must hasten and broaden the provincial role in financially supporting social services through provincial income taxes, which were only partially addressed in the recommendations of the 2008 Provincial Municipal Fiscal and Service Delivery Review.

The use of current value assessments (CVA), as a means to calculate property owners’ payments for municipal services received, continues to unfairly distribute social costs. There are precedents in other North American jurisdictions for a fairer process, acknowledging that there are municipal services that should not be paid for solely on the basis of the value of one’s property.  To use pure CVA to calculate tax obligations amounts to a tax on unrealized capital gains.

Understand that property assessment is just one component that affects your property taxes. If you feel the valuation for your property is wrong, consider challenging it, as described below.

Learn more below, about what affects your property taxes, and what you can do about it.

Read onward, or jump to additional taxation sub-topics on this webpage: 

Understanding (or Challenging) your Property Assessment

The Underused Housing Tax

The Foreign Homebuyer Ban (federal) & Foreign Homebuyer Tax (provincial)

2023 Property Tax update from the Municipal Property Assessment Corporation (MPAC):
  • due to the COVID-19 pandemic, the Ontario government postponed the 2020 Assessment Update
  • property assessments for the 2022 and 2023 property tax years will continue to be based on January 1, 2016 current values
  • as soon as an assessment announcement is made, property owners will be made aware.

The ongoing assessment postponement does not change the work underway to maintain the extensive property database and annual assessment rolls. As part of MPAC’s role to assess and classify more than 5.5 million properties across Ontario, they produce an annual report to discuss all their activities that support municipalities to make informed decisions about their community, including the distribution of property taxes. Since MPAC’s last report, Ontario has grown by approximately 100,000 new properties and they have added more than $37 billion in new assessment from new construction and improvements to existing properties. You can read the 2022 report here: https://news.mpac.ca/2022-municipal-partnerships-report.

MPAC also provides many services that help municipalities to maintain accurate records, including updating address, ownership, and school support changes, maintaining voter information, classification changes (including exemptions), tax applications, as well as severances and consolidations.

More information on property assessment and taxation is available from MPAC here:  https://www.mpac.ca/en/UnderstandingYourAssessment/PropertyAssessmentandPropertyTaxes

According to MPAC, the ongoing assessment postponement does not change the work underway to maintain the extensive property database and annual assessment rolls. As part of MPAC’s role to assess and classify more than 5.5 million properties across Ontario, they produce an annual report to discuss all their activities that support municipalities to make informed decisions about their community, including the distribution of property taxes. Since MPAC’s last report, Ontario has grown by approximately 100,000 new properties and they have added more than $37 billion in new assessment from new construction and improvements to existing properties.

You can read the 2022 MPAC report here: https://news.mpac.ca/2022-municipal-partnerships-report.

MPAC also provides many services that help municipalities to maintain accurate records, including updating address, ownership, and school support changes, maintaining voter information, classification changes (including exemptions), tax applications, as well as severances and consolidations.

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Other Taxes & Regulations of Note:

Related News: Jan 4, 2023 – Federal and provincial legislation that cottagers should pay attention to (Cottage Life) – an overview about the Non-Resident Speculation Tax; Bill 23; Bill 109; Bill 39; Underused Housing Tax (UHT); and the Prohibition on Purchase of Residential Property by Non-Canadians Act.

About the Underused Housing Tax (UHT):

Underused Housing Tax UPDATE: Feb.15/2023 – If you are an affected owner of a residential property in Canada on December 31, you must file an Underused Housing Tax return for the preceding calendar year. Even if your ownership of the property qualifies for an exemption and you do not owe any tax, you still must file a return. Consult this government webpage which outlines who is “excluded” and who is “affected” by this tax. FOCA has found that the Canadian Revenue Agency has finally posted the tax form for the Underused Housing Tax (UHT). (Note: you won’t be able to use the CRA’s UHT Designation Tool if you are water-access only or your property does not otherwise have a postal code.) Also read the earlier news, below, for more context.

Related & Earlier News:

January 26, 2023 – Underused Housing Tax (UHT): Last year, FOCA pressed the government for clarity about the new UHT (that was implemented by the federal Department of Finance effective January 1st, 2022 and is payable at tax-time in 2023), asking that seasonal owners be excluded from this tax (1% of current property value, annually), and the government did eventually bring forward an exemption for Canadian owners of vacation or recreational properties, with certain conditions. Nevertheless, cottage owners who are neither Canadian citizens nor permanent residents may still be affected. Amazingly, there is still no posted information about how to file a return, and FOCA’s latest inquiry (January 17) has gone unanswered.

Feb.8, 2023 – The Underused Housing Tax affects more people than expected (Globe & Mail)

July 12, 2022 – As a cottager do I have to pay the Underused Housing Tax? (Cottage Life, quoting FOCA)

July 12, 2022 – US Congressman Higgins requests meeting with Canadian Finance Minister Chrystia Freeland to address Underused Housing Tax (Niagara Frontier Publications; WNYpapers.com)

March 2022 – Since mid-last year, FOCA has been expressing concerns about the new Underused Housing Tax (UHT) which was implemented effective January 1, 2022 by the Canadian federal Finance department, and will be assessed/payable in 2023. FOCA’s concern was that secondary property owners (“cottagers”) could be unfortunately and mistakenly penalized by a federal policy that is really designed to free up rental and other accommodations in population centres (mostly urban) that are facing housing shortages. It is now clear that Canadian owners of secondary properties will not be impacted by this tax; however it remains unclear for American and other foreign owners of rural waterfront property in Canada. FOCA remains vigilant on this issue. Read related information here:

Also, here is a March 2023 update about the UHT from our legal colleagues at BLG who supplied the following information to FOCA: The Minister of National Revenue announced the following in the Economic and Fiscal Update 2021 released on December 14, 2021: “Furthermore, the government plans to bring forward an exemption for vacation/recreational properties, which would apply to an owner’s interest in a residential property for a calendar year if the property: (1) is located in an area of Canada that is not an urban area within either a census metropolitan area or a census agglomeration having 30,000 or more residents; and (2) is personally used by the owner (or the owner’s spouse or common-law partner) for at least four weeks in the calendar year.” Currently, the proposed Underused Housing Tax Act (the “Act”) does not explicitly contain this exemption. However, it does give the Ministry of Finance the ability to create “prescribed” classes of property by regulation, and also to create new exemptions that apply if a property “is located in a prescribed area and prescribed conditions” are met.  It is possible that the announced exception is therefore intended to be contained in this regulation, but no draft regulations have yet been issued. In other words, this exemption may be addressed by regulation at a later date. We are expecting to see fairly comprehensive regulations issued after the Act is implemented, as many details of the Act are left to be prescribed. Until this exemption is prescribed by regulation, however, it is still possible that cottage owners who are neither Canadian citizens nor permanent residents will be subject to Underused Housing Tax if they do not fall within another exemption under the Act. That said, note that just like the Act itself, which as drafted will be effective retroactively to January 1, 2022, it is possible that the regulation will be retroactive to January 1 as well.

It is FOCA’s view that an updated and strengthened EBR can provide better environmental protection, public participation, and provincial government accountability. The LCO is currently seeking public feedback on this important topic. Learn more, and find out how to submit comment to LCO by November 25, 2022https://www.lco-cdo.org/en/our-current-projects/environmental-accountability-rights-responsibilities-and-access-to-justice/

About the Foreign Homebuyer Ban (federal) & Tax (provincial):

Jan 4, 2023 – Foreign homebuyer ban: What it could mean for markets where the new rules don’t apply (Global News) – “Canada’s two-year ban on non-resident buyers, which came into effect on Jan. 1, doesn’t apply to every buyer, every kind of property or every market in the country. For instance, the federal government confirmed in the legislation introduced late last year that the ban on non-resident buyers doesn’t include recreational properties like cottages…”

March 29, 2022 – Ford government boosts provincial foreign homebuyer tax to 20%, applying it provincewide (CBC News) – where previously it was 15% and only applied to properties in the Greater Golden Horseshoe region.

related: April, 2022 – Ontario expands foreign home buyers tax (KPMG)

You asked, FOCA answers: Property Re-assessment


A member asked FOCA:

We recently did some renovations to the cottage which triggered a reassessment notice from MPAC. I know retail sales prices have gone crazy in this area over the past 18 months. My question: is the new assessed value I received from MPAC based on current (2021) comparables, or 2016 values?

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