What is a property assessment notice?
By the end of 2016, the Municipal Property Assessment Corporation (MPAC), a not-for-profit corporation created by the Province, will have issued assessment notices to all property owners in Ontario representing property values as of January 1, 2016. The notice also indicated the respective phased-in assessment values for the tax years 2017 to 2020 inclusive. Market increases in assessment between the valuation periods will be phased-in over the next four years, commencing in the 2017 tax year. Decreases in assessment value between said valuation periods, on the other hand, will be realized immediately for tax years 2017 to 2020 inclusive.
In November of any given tax year, MPAC issues notices to taxpayers in situations involving:
- A change in ownership
- A change in school support
- A change in value as a result of a property taxpayer Request for Reconsideration of an assessment or an Assessment Review Board (ARB) decision
- A change in the property that will either increase or decrease its value; such as an addition
- A new structure built
- Additional information found that affected the value of the property
What is a property assessment?
Assessment is one of several components used to determine your property taxes. Using your property’s assessment value, you can estimate your residential property taxes using the City of Ottawa’s Property Tax Estimator. Please note that the tax estimate(s) provided do not reflect any budgetary increases or specific charges for the property (i.e. local charges).
Why have I received a property assessment notice in the mail?
The Budget Measures and Interim Appropriation Act, 2007 (Bill 187), which was passed by the Ontario government, altered assessment cycle changes from an annual update to a four-year cycle commencing in the 2009 tax year (based on a January 1, 2008 valuation date). The Act also incorporated mandatory phasing-in of assessment increases over the four-year cycle for residential, farm and managed forest class properties.
Furthermore, the Budget Measures and Interim Appropriation Act, 2008 (Bill 44), expanded the four-year assessment cycle to include all property classes (i.e. residential, commercial, etc.). These phased-in assessment values are used to determine your property taxes for the specified tax years.
How does MPAC establish the assessed value of my property?
MPAC analyzes real estate market information from similar types of property in your area to establish your property's value. Any one of three methods may be used for this analysis: the selling price of similar properties (i.e. residential), the rental income a property generates (i.e. office buildings and shopping centres), or the cost to replace a property (i.e. industrial buildings). Each method takes the location of a property, the size and quality of any buildings, and features which might add to or take away from a property's value into consideration.
MPAC operates under the authority of the Municipal Property Assessment Corporation Act. Every municipality in Ontario is a member of the corporation, which is governed by a board of directors selected by Ontario's Minister of Finance.
How exactly are residential property taxes calculated?
Residential property taxes are calculated using your assessed value, the municipal tax rate, and the education tax rate, which is set by the Province of Ontario. The formula is:
- assessed value x municipal tax rate = amount of municipal property tax
- assessed value x education tax rate = amount of education property tax
- municipal property tax + education property tax = your property taxes *
* Please note that, if applicable, other charges such as local improvements, municipal drains, solid waste charges or business improvement area (BIA) charges might be added to your tax bill. Visit our tax policy webpage for further information.
What other factors influence my property tax bill?
As noted above, the revenue requirements of the municipality and the amount required by the Province to fund education are also key factors. In addition, any amendments to the provincial legislation affecting municipal taxation could affect your municipal tax rates. Only by applying the current year’s tax rates to your property will you know the overall impact on your property taxes. These rates are not known until the current year’s budget and tax policies are finalized, and the effects of any provincial legislative changes are determined. Visit our tax policy webpage for further information.
How can I find out the assessed value of properties similar to mine?
You can use MPAC’s About My Property tool to search for comparable assessment values. Instructions for using the tool are provided for you. Remember that January 1, 2016 phased-in assessment values are used for taxation purposes for tax years 2017 to 2020 inclusive. For further information on the About My Property service, please visit MPAC’s website.
I purchased my property in 2016. Shouldn't my assessed value be the same as the purchase price?
The sale of real property is affected by many factors, such as a buyer's desire to acquire a particular property and a seller's willingness to reduce the sale price in order to achieve a sale. This could result in similar properties selling for different amounts, which would result in different amounts billed. MPAC therefore determines an assessed value that is in the middle range of selling prices for similar properties. This ensures that the tax burden is equitably shared among similar properties.
Another reason the assessed value and price might not be the same is that the market may have changed between the current valuation date of January 1, 2016 and the date you purchased or negotiated your property.
What if I don’t think my assessed value is correct?
You can ask MPAC to have another look at your assessed value by applying for a Request for Reconsideration (RfR). This is the mandatory first step in the appeal process for residential, farm and managed forest properties (for other property classes filing an RfR is optional, therefore owners of such properties may instead file an appeal directly to the Assessment Review Board if they so choose) . The deadline for submitting your RfR is printed on your property assessment notice and is typically March 31 of the taxation year for which you wish to appeal. There is no cost to file an RfR application.
If the reconsideration process results in a change to your assessment, it will be amended accordingly. If not, or if you are not satisfied with the amended assessment provided, you can choose to file a complaint to an independent tribunal called the Assessment Review Board (ARB). The deadline for filing an appeal with the Board is 90 days after MPAC has notified you of its decision in relation to your RfR submission. There is a cost associated with an ARB appeal.
Both you and MPAC will be asked to appear at a hearing before the ARB to present evidence. The Board's decision is binding for both you and MPAC and, if it reduces your assessed value, your taxes will be subsequently be adjusted by the City of Ottawa. The City also has the right to appear at your hearing before the Board. The Assessment Review Board Notice of Complaint form and a list of associated costs for filing an ARB appeal are available on the ARB’s website.
Who do I contact if I have questions?
If you have questions about your Property Assessment Notice, assessed value or about assessment in general, please contact the MPAC office; toll free at 1-866-296-6722 or by fax at 1-866-297-6703. You can also visit the MPAC website.
If you have any questions about your municipal property taxes or municipal tax rates, please contact the City of Ottawa Revenue Services at 613-580-2444 (TTY 613-580-2401), by fax at 613-580-2457, or by e-mail at firstname.lastname@example.org.