The Municipal Property Assessment Corporation (MPAC) used to assess every single property in Ontario every four years, but the provincial government put that process on hold when COVID hit — and it’s not clear when it will begin again.
The provincial non-profit corporation does the assessments and shares those values with municipalities so they can determine property and education taxes. The last provincewide assessment was carried out in 2016.
Here’s a look at what this means for you and your property.
Why has it been eight years?
MPAC was all set to update every property’s value in 2020, on schedule, but the pandemic hit and the Ontario government postponed the process.
Some provinces continued the updates through COVID, while others hit pause.
Ontario never restarted the work, however. Last year, ten groups — including the Association of Municipalities of Ontario (AMO) — wrote to Finance Minister Peter Bethlenfalvy calling on him to resume the process and set a new date.
“Across Canada, including here in Ontario, families are feeling the pinch of inflation. As homeowners’ mortgages come up for renewal, many are experiencing significant increases in the cost of living,” Bethlenfalvy wrote back.
“Now more than ever, families need and deserve predictability in their household budgets.”
Bethlenfalvy announced a review of the taxation system and property assessment that will “focus on fairness, affordability and business competitiveness.”
When will people get those notices in the mail again?
There is no date set for this.
A spokesperson for the finance ministry said in a statement that the province is “making good progress through this review and appreciate the constructive input that has been received.”
The statement said the province plans “to seek input on the design of appropriate measures while also considering manageable timelines for introducing any changes.”
What’s been happening in the meantime?
The system must essentially pretend it’s eight years ago, as the date still set out in legislation is Jan. 1, 2016.
At the AMO conference in Ottawa in August, MPAC put on a well-attended session.
Nicole McNeill, the president and chief administrative officer of MPAC, said the association is getting ready as it waits for a new date.
It’s enhancing its data and creating tools so people can get instant information online about their properties.
While MPAC hasn’t been able to do a comprehensive re-assessment of every last property, it still does assessments when people buy properties or do renovations, for instance.
Those must be dated at 2016 values, however, to keep a level playing field.
“The challenge is trying to explain to someone going back in time to 2016, because it doesn’t resonate,” said McNeill.
“Everyone is watching [real estate sites] and seeing what homes sell for in their neighbourhoods … and it doesn’t reflect a 2016 value anymore.”
So basically, until the Progressive Conservatives set a new date, the system is stuck in a time machine, always having to consider what a property might have sold for eight years ago.
How big could the adjustments be, whenever MPAC does send out notices again?
MPAC has a really good idea of what those updated values could look like because it has kept abreast of market conditions, sales data and more.
It says its database is a third the size of Netflix’s and includes information about every last property in Ontario — some 5.5 million of them. Those include all kinds of properties in local markets that can have very different conditions.
The provincewide picture, however, shows steep increases overall.
Over the past eight years, residential properties across Ontario have increased 94 per cent, MPAC says, while multi-residential buildings increased 104 per cent.
Farm values have more than doubled, increasing 128 per cent. Industrial properties have jumped 182 per cent, with logistics warehousing a big part of that trend.
Should people be worried, then? Won’t it mean paying a whole lot more tax when properties finally do get reassessed?
Some properties might end up paying more tax but others could pay less.
By law in Ontario, the system is revenue neutral. Municipalities won’t suddenly see a windfall after a provincewide reassessment.
Properties go up by an average, and if every property went up exactly the average, no one would see any change. They would keep paying their same share of the overall tax a city needs to collect.
But if you live in an area where your property increases by more than the average, you’ll pay more tax. If your place goes up by less than the average, expect to pay less.
Mike Moffatt, who follows housing and affordability quite closely with the Smart Prosperity Institute, says the next reassessment will create a lot of winners and losers.
“It does feel like the provincial government is kind of kicking the can down the road,” Moffatt said. “But that’s just going to make that adjustment more and more difficult.”
And you can expect those who have to pay more tax will be vocal.