Picture this scenario: this morning, you received in the mail the latest property tax bill from the municipality (the City of Toronto, for example). As you scanned the document, you came to reflect on how the government assesses the value of your property for tax purposes. Let’s explore this topic together.
Who assesses the value of your property?
The Municipal Property Assessment Corporation (MPAC) is responsible for accurately assessing and classifying property in Ontario for the purposes of municipal and education taxes. MPAC is an independent, not-for-profit corporation funded by all Ontario municipalities, which was has created and maintains a comprehensive database of information for each of the more than five million properties in Ontario. It is responsible for delivering property values, insights and services to taxpayers, municipalities, governments and businesses.
Does MPAC assess the value of both commercial and residential properties for tax purposes? Yes. MPAC is the sole provider of assessment services for the Province of Ontario. It is the biggest assessment jurisdiction in North America, maintaining an inventory of more than 5.6 million properties with an estimated total value of more than $3.1 trillion.
How does each Ontario municipality know the assessed value of each property in its jurisdiction? MPAC administers a uniform, province-wide property assessment system based on current value assessment. One of its duties is to prepare an assessment roll for each municipality in Ontario. Municipalities use the information in the assessment roll to calculate property taxes.
What’s a simple way of describing the way that the property assessment and taxation system is set up in Toronto, and throughout Ontario?
Property assessments are determined, then assessments are shared with municipalities, then Municipalities determine investments required to build thriving communities. Each component of Ontario's property assessment system plays an important role:
- The Government of Ontario establishes the province's assessment and taxation laws and determines education tax rates.
- MPAC determines property assessments for all properties in Ontario.
- Municipalities determine revenue requirements, set municipal tax rates and collect property taxes to pay for municipal services (note that Provincial Land Tax and levies by local boards are collected in unincorporated areas and contribute toward important services).
- Property owners pay property taxes which pay for services in the community. You also pay education taxes that help fund elementary and secondary schools in Ontario.
How often are property values reassessed?
MPAC completes a province-wide Assessment Update every four years based on a legislated valuation date. (is a fixed day on which all properties are valued). The last province-wide Assessment Update took place in 2016, based on a January 1, 2016 valuation date. In 2020, the province-wide assessment update was postponed due to the COVID-19 pandemic. As part of the Ontario Economic Outlook and Fiscal Review, on November 4, 2021, the Province announced its decision to postpone the assessment update again. Property assessments for the 2024 property tax year continue to be based on January 1, 2016 assessed values.
How exactly is my property tax calculated?
To establish a property’s assessed value, MPAC analyzes sales of comparable properties in the area. This method, called Current Value Assessment (CVA), is used by most assessment jurisdictions in North America. In addition, we look at all of the key features that affect market value. When assessing residential properties 200 different factors are considered, however five major factors account for approximately 85% of the value: location, lot dimensions, living area, age of the property, adjusted for any major renovations or additions, and quality of construction.
Where can I learn how exactly MPAC assessment my specific property and similar properties in my area?
AboutMyProperty is a tool designed by MPAC for property taxpayers to explain how it assessed their property and similar properties around it. The online tool also provides information about how MPAC assessed different types of properties: Residential, Farm, Multi-residential and Business.
For any additional questions you may have on this topic, I’d encourage you to connect with MPAC directly: MPAC.ca.