The Ministry of Finance states there are a number of important decisions for the 2017 taxation year along with the property assessment update.
Correspondence from Allan Doheny, assistant deputy minister, was reviewed by Pulsinch councillors on Jan. 18.
Doheny stated there were a number of changes for 2017 related to municipal flexibility in setting tax policy and to provide a property assessment update.
“As you may know, the province has been reviewing the Vacant Unit Rebate and Vacant/Excess Land Subclasses,” Doheny wrote.
“The review was initiated in response to municipal concerns regarding the appropriateness of the lower tax level provided through these programs and any unintended implications this may have for local economies.
“Since the 1990s, these programs have provided tax rebates and reductions to property owners who have vacancies in commercial and industrial buildings or land. In response to municipal requests, the province introduced a legislative framework through the 2016 Ontario budget to facilitate potential program changes as a result of the ongoing review.
The province is now moving forward with providing municipalities broad flexibility for 2017 and future years to tailor the programs to reflect community needs and circumstances, while considering the interests of local businesses. Municipalities can implement changes by notifying the Minister of Finance of their intent to utilize this flexibility and providing details of the proposed changes along with a council resolution.
The province is providing municipalities with increased flexibility to manage business property taxes through the business property tax capping program. This builds on 2016 enhancements to the capping program that provided municipalities increased flexibility to accelerate progress to current value assessment (CVA) level taxes, as well as the option to exit or phase-out from the program.
Beginning in 2017, eligibility criteria to allow municipalities to phase out the capping program are more extensive. Municipalities may choose to exclude vacant land from the phase-out eligibility criteria where all properties must be within 50% of CVA level taxes.
Municipalities will also have the option to limit capping protection only to reassessment related changes prior to 2017. For municipalities that select this option, reassessment related increases, beginning in 2017, would not be subject to the cap.
The adoption of any flexibility measure is a municipal decision and would be enacted through a municipal bylaw.
The province has heard concerns about the significantly higher property tax burden for multi-residential apartment buildings and its potential implications for housing affordability in the rental market. In response to these concerns, the province has announced it will review the property taxation of multi-residential apartment buildings.
The review will involve extensive consultations with municipalities, as well as other affected stakeholders, including renters and apartment building owners. Consultations are anticipated to begin in early 2017.
Currently, the average municipal property tax burden on multi-residential apartment buildings is more than double that of residential properties. In many cases, multiresidential properties are taxed by municipalities at nearly three times the rate of residential properties.
For the 2017 tax year, municipalities with a multi-residential tax rate that is double the residential rate or higher will be restricted from increasing this burden.
