Services Company Contact Archive
Assessment Appeals
Real Estate Consulting
Dispute Resolution
Property tax caps do not work.
Across Canada, many municipalities have undertaken significant general assessments. For example, in 1998, Ontario undertook the largest single general assessment in North American history with over 3.9 million parcels re-assessed to market value.

Assessed values in Ontario increased by up to 400%. At the same time property tax rates increased, translating to major tax increases for property owners, causing a public outcry. The Province of Ontario decided to establish a property tax cap of 10%, 5%, and 5% for the first, second and third years respectively. This cap has been applied to the tax increases as well as the decreases. For that reason, property owners who were paying more than their fair share in previous years, will continue to bear the burden of higher taxes for the next three years. For example, if the property owner was entitled to a 30% reduction in taxes, that property owner will have to pay 20% more this year. At best, this system could be referred to as rough justice. It is an example of political expediency in lieu of the moral solution. A correction of all wrongs as they are brought to light, is needed instead.

Municipalities considering a policy of capping tax increases and decreases, should consider Calgary’s example. Examine the total tax assessment base and adjust the mill rates accordingly. This will ensure that the taxpayers, on average, pay close to what they paid in previous years.

Calgary is currently experiencing a general assessment updating the market values from the previous base of 1992 to the 1998 base timeframe. With an estimated 30% increase in market values during this timeframe, the City of Calgary is considering a drop in the mill rates by approximately 30% in order to create a "revenue neutral" property tax assessment year. Essentially, this means that if an assessment went up by 30% or less the taxes will be the same as last year or less.

Some Calgarians experienced increases as a result of the market value assessment being updated. Where the assessments are higher than the fair market value, the property owner has the right to appeal, in order to put the property on an equal footing with other similar properties.

Ontario's property taxpayers who were forced to pay more than their fair share as a result of the capping of decreases in taxes over last year, had no recourse. Many taxpayers with assessments higher than market value, continued to appeal their assessments even though their taxes were capped at 10% of the 1997 taxes. This created a huge number of appeals and a serious backlog of work for the Assessment Review Board. The 1998 appeals will not be heard until later this year! In effect this system did not work.

Municipalities that establish caps on taxes, take away the rights of property owners to a fair assessment and in turn the payment of their fair share of taxes. There are almost as many losers as winners in situations like this.

The Assessment Monitor - January 2008 - Report on Calgary Property Tax & Assessment Matters
Why your hotel assessment should always be less than market value.
Property tax caps do not work.
Do post-tension structures experience stigma?
To one-owner rental condominium apartment projects.
Hotels: Assessment vs. Market Value - The Missing Link