Feature Article July 24, 2003
LAND O' LAKES NewsWeb HomeProperty Assessment Brings Large Tax Increase on Lakefront Properties
Property owners on Sharbot Lake share a concern with many cottage and waterfront home owners throughout the province. Their properties have been reassessed and the value has been increased. This has led to large municipal tax increases.
That is why a representative of the Municipal Property Assessment Corporation was invited to the Annual General Meeting of the Sharbot Lake Property Owners Association (SLPOA) last Saturday.
Mark Capitan presented an outline of MPAC and the process it uses to determine property values. MPAC has been around since 1971. Until 1998 it was a division of government, and it was then turned into an independent, non-profit corporation that is owned by the municipalities of Ontario. It operates as a monopoly, with all municipalites being mandated to use our services, Capitan said.
In June of this year, the city of Toronto began looking for support for a plan to set up their own property assessment corporation. Capitan pointed out that if Toronto were allowed to withdraw, the cost of assessment services in the rest of the province would skyrocket. The annual budget of MPAC is $140 million.
The property assessments that have brought about large increases to lakefront properties, in the range of 40-50 per cent, according to some of the people attending the SLPOA meeting, are based on the assessed value of properties as of June 30, 2001. The values of each of the 47 million properties in Ontario were given a market value for that date by MPAC. The province is mandating that MPAC complete a new assessment for each property on Ontario on an annual basis.
The kind of property assessments people are accustomed to are usually done by assessment companies, either for banking or sales purposes. They involve a visit by an assessor, who takes measurements, looks at the sale price of similar properties in the area, and assigns a value to the property.
In the case of MPAC, most of the work is done by updating computer data. MPAC maintains a database containing 2.4 billion pieces of information, according to Mark Capitan.
It is not surprising, with so much data to consider about so many properties, that some of the assessments MPAC comes up with are not an accurate reflection of the actual value of a given property.
The frustrated property owner of an 81-year-old cottage on Skootamata Lake, who attended the meeting in order to hear from MPAC, expressed his frustration with the MPAC process by saying I dont know what kind of entrails that you people examine to come up with your values, but they have nothing to do with what really exists on the ground.
The township of Central Frontenac has received so many inquiries about property assessments that seem out of line with reality, that staff have begun to conduct a survey to find out how many of the properties in the township have received unusual assessments. As well, a Mr. Condant, spokesman for MPAC, confirmed in a phone interview that properties in Central Frontenac are being looked at by MPAC as well to see if mistakes have been made.
Mark Capitan talked as well about the two procedures whereby property owners can challenge their assessment. They can put in a request for re-evaluation to MPAC at any time, and they have the option of appealing their assessment to an independent tribunal. The assessments which were the basis for the current tax year were mailed to each property owner in November of 2002, and the deadline for launching an appeal was March 31, 2003.
From now on, properties will be reassessed yearly, and the notices sent out each November, so property owners will be able to appeal their assessments over the winter. It costs $50 to launch an appeal.
John Parisellli, who owns a house on Sharbot Lake, has gone through the MPAC ringer this year. In a telephone interview he described how his property assessment was increased by 25% last year. He put in a request for re-evaluation on March 6, and was then told by MPAC that it would take a while to evaluate his request. With the deadline for appeal looming, Pariselli decided to pay the $50 and set up an appeal, which is set for September. He describes the process of preparing for the hearing as expensive, time consuming, and frustrating. It has been incumbent on him to gather information from his neighbours. However, he fears that if he uses other peoples assessments as examples, his appeal may have the inadvertent effect of causing increased assessments for them, by bringing them to MPACs attention at the hearing. This possibility was not denied by Mark Capitan. In a conversation that took place outside of the Property Owners Association meeting, Capitan said, That is a possibility. You might want to use addresses and not names.
Mark Capitan was quick to point out that MPAC does not set municipal tax rates. All we do is provide property assessment information to municipalities, he said, they decide what to do with the information. this led some of the property owners to ask why no representative of the township was at the meeting to address their concerns and justify the tax increases that have been levied. One of the property owners pointed out that he was from Ottawa, and the City of Ottawa decided not to take advantage of the increase in property values that resulted from MPAC reassessment last November. It lowered their tax rate a commensurate amount.
It was then admitted by the Sharbot Lake Property Owners Executive that the township had not been invited to send a representative to the meeting.
Contacted subsequently, Mayor Bill MacDonald said he would have attended the meeting if invited.
We have received a lot of questions about taxes this year, and for that reason we have produced a pamphlet outlining what we are doing with tax dollars in 2003, he said. (see How does Central Frontenac spend taxpayers money?)
How does Central Frontenac spend taxpayers money?
In 2003, for every $100,000 of property assessment in Central Frontenac, the township collected just over $1600, an increase of 3.7% over 2002. MPAC reassessment has increased the total property assessment in the township by $38 million, which brought in an increase of $576,000 in taxation based on the current tax rate.
Forty two per cent of the taxes collected by the township are paid out by the township for education and to the County of Frontenac. The remaining budget for the township of Central Frontenac in 2003 is just under $5 million. This is a $593,000 increase over the 2002 budget. More than half that increase is in the roads budget. Mayor Macdonald said that the Province of Ontario has said we must build salt containment units by 2005, and we have put extra roads money in the budget to start paying for those units. Thats one of the reasons for the $310,000 increase in the roads budget. Overall, the road budget of $2.5 million represents more than half of the total monies the township will spend this year.
The other major increase is in the fire budget, which is almost $150,000 higher in 2003 than it was in 2002. This extra money is being put towards a fund to replace ageing fire trucks. The township has agreed to a seven-year plan to replace the trucks. MacDonald pointed out that taxpayers will see a benefit in this, not only through the improvements to the fire service which will result from giving the volunteer firefighters better equipment, but also because insurance companies look at the age of fire equipment when they come up with insurance ratings for townships.
They are saying they will lower the fire rating of the township if we dont upgrade our trucks. This could cost home owners $100 to $150 annually in increased fire insurance costs, he said.
