From a world19 subscriber, Dec. 8/03
My comments include that:
An ARB filing helps negotiations, and if a settlement is
reached, the ARB filing fee is refunded (after a series of arguments with them of
course..)
MPAC considers their valuation algorithm 'proprietary', and
part of their 'competitive' positions, a deep load of horseshit, since they are the former
assessment division of the Ont govt, and have a govt mandate as the exclusive assessor for
Ontario.
When MPAC first took over, all data for an area was available
on the web. The following year, only 12 properties could be accessed, and that after
getting an ID+ password from MPAC, and a detailed property record could only be had for 6
properties, or $10 each for more. It was always about money to MPAC.
MPAC, despite its name, is controlled by the province, but
funded by a levy of $130 million each year from municipalities. It's mandate, regulations,
board appointments, and core legislation come from Queens Park.
MPAC makes a little money, about $6 million, licensing the
public data to banks, insurance co's etc. They licensed their precious algorithm once, for
$250,000, to I think a govt in Nova Scotia, which is, dividing 250,000 by $130 million,
not even 1/4 of 1% of their levy income, and yet this is used as an excuse for not
releasing the algorithm.
It appears to be, overassess, then wait for argument, then
come back next year with an outrageous number again, argue, etc. The numbers don't often
appear fair, accurate, or related even to known sales.
In addition, MVA is a crazy way to tax property, as it
amounts to a capital tax on non-realized profits, and is a disincentive to improve a
property, as each improvement will become a liability when it is assessed - even free
labour can be risky, as taxable value is created.
Toronto paid about $500 million more in 'education' taxes
than we received last year. 'Education' taxes flow to general revenue, and are not
segregated, but are used to offset tax cuts for corporations.
It would be helpful to maintain a public database of
properties and their assessments, history etc, as a resource to homeowners.
A Freedom of Info Request for all the assessment data on
CD-ROM was pending in the courts last year. The matter may have been decided in favour of
our right to get this data, in which case, and public data, it could be hosted on another
server for public use.
We received the following two comments from a
world19 subscriber. Feb. 2004.
world19,
Further to the debate, here is a copy of my letter published
in the Star, Jan 19, 2004, when residents of Oakville expressed dismay at apparently
random and disproportionate changes in their assessments:
The market value of a property is, at best, a measure of
someone else's desire to own that property. It bears no relationship to the cost of
municipal services or to the owner's ability to pay. Why should the price that a neighbour
receives for leaving the neighbourhood affect the taxes of those who remain?
Now that the market value assessment racket has struck an
apparently affluent neighbourhood, I hope the victims will have both the will and the
resources to force the government to change this irrational system.
And this one, commenting on the fundamental flaws of the
current property tax system: (Feb. 20)
world19,
Too much of the debate on property assessment and taxes
centres on individual tactics to deal with the more glaring inequities; gross
overvaluation of properties and inconsistent valuations of similar properties. Of
necessity, owners share with one another how best to launch appeals to keep their
valuation at or below the neighbourhood mean but none of this addresses the fundamental
flaws of the system.
What is missing is a strategy to attack the irrationality and
unfairness of the entire property taxation system. Residential property ownership is an
expense, not a source of income. Capital gains may be realized only by abandoning the
ownership and use of the property as a home. Rising costs cannot be claimed against income
or other taxes. Yet, residential properties are burdened with the lion's share of the
urban infrastructure cost. Commercial properties do generate income (hence the name) and
the expenses offset income taxes. Yet they are at least partly protected by legislation
against rising property taxes.
As I see it, the solution lies in abandoning valuation
entirely as a basis for taxation and limiting property taxes strictly to the cost of
servicing the property. Property taxes should reflect the fixed costs of providing the
property with water, sewage, garbage, police, fire services, local roads, electrical and
communications networks and the like.
Part of the infrastructure, e.g., arterial roads, public
transit, traffic control systems, serves the entire city and its surrounds; arguably
province or the country as a whole. This should be financed from income taxes on all the
beneficiaries, rebated to the city; an idea that seems, at last, to be creeping into
federal and provincial thinking.
The variable costs, or at least the portion over a basic
level, should be covered by user fees. This is not radical thinking. Many European cities
charge fees for excess garbage; Toronto is trying to reintroduce water metering; we are
already accustomed to paying for electrical usage.
Finally, if we believe in community and social support, the
system should provide relief to those who would be unreasonably burdened by these costs.
We already have the mechanisms for doing this; all we need now is to
rationalize the rules for eligibility and levels of support.
This is not a simple agenda but something of this nature must
evolve if we are to make cities like Toronto good places to live and work.
From a correspondent in western Ontario. Feb.
2004
Dear Neighbour,
I too have been hit and re-hit with the same garbage about
fair market value ... blah .. blah.. blah... I live in "The town of Minto" about
an hour north of Guelph, and it is VERY evident that assemtents are 100K over what they
should be. Our neighborhood is banding together to fight as well. If you could please
e-mail me what ever you have collected as far as ammunition to fight this injustice it
would be much appreciated.
I too agree that we are doing MPAC's homework and the only
way to fight this is to do battle with their our guidelines. They have been beating us
over the head with their "Fair market value" we have to find a way to use it
against them. As well, our neighborhood went to our local council meeting and witnessed
the presentation from MPAC. They stated there were three ways they can come
to the number. What are the other two and why aren't they being used?.
From a correspondent in Victoria County
Jan. 2004
Hello,
We have become very alarmed at soaring property value
assessments.
We are angry that the ever increasing assessments have given
municipal governments the opportunity to mislead us about tax increases.
We demand that our politicians freeze property assessments
immediately and put into place a new system that is fair, stable, and predictable.
If you agree then please take a look at the attachments
included. There is a letter and a list of addresses of the politicians who need to hear
our voices.
Please feel free to edit the letter or, better still, add to
it your own personal stories and mail, fax, or email to the Premier and to every
politician that represents your area at both the local and the provincial levels. And,
include your own address and contact information to add force to the letter.
The more people that contact the government, the more they
will listen to us. Please forward this email to everyone you know who has the same
concerns.
Thank you!
The above correspondent sent 2 attachments (both links
are WORD documents):
Another view below. Received Feb. 9/04,
from an anonymous correspondent (signed "S") who forwarded a column by the
publisher of an Eastern Ontario newspaper (http://www.thereview.on.ca/)
Wow, your ranting about MPAC are really off base. To be fair,
I understand if you are upset about your Assessement but before you start sending out
emails and riling up our neighbourhood, you should really understand the entire process.
Below is a different article, different reality, also, you should really speak to a Rep at
MPAC who can explain the process to you, like they did to me. You may be realise that most
of your rantings are way off base and you are completely wrong and very unfair.
Louise Sproule (Independent Newspaper)
A property tax system with little appeal There is an
intricate, if unappealing, system in place to determine the taxes paid by property-owners
in Ontario. The system's near-indecipherable intricacy is exposed when taxpayers try to
determine the true origins of tax increases. There are several variables which have
already come into play by the time you receive your municipal tax bill.
A key element to understanding your tax bill is the
assessment value assigned to your property. While these values were historically lower
than the price your property might fetch on the open market, a new system called
"current value assessment" is now used. This system is supposed to reflect what
your property would have sold for on a specific date. At the moment, in Ontario that magic
sale date is June 30, 2003. The Municipal Property Assessment Corporation (MPAC), which
operates under the authority of the Municipal Property Assessment Corporation Act, is
responsible for assessing and classifying all property in Ontario. Every municipality in
Ontario is a member of MPAC.
To establish your property's value, MPAC analyzes property
sales in your area to obtain a basis for the assessed values of similar properties.
Next, one must realize that the money your municipality needs
to deliver services is provided primarily through property taxes. The taxes each
property-owner pays are calculated by multiplying the assessed value of a property,
provided by MPAC, by the tax rate set by the municipality. Tax rates are calculated by the
municipal council, which must consider how much revenue is needed to operate the
municipality and how large the total assessment is within the municipality. A simple way
of thinking about this is to imagine two municipalities with the same operating costs. Now
think of one municipality having 25 per cent more households of average value. In the
municipality with more households, the same costs will be divided among more people,
thereby reducing taxes for that municipality.
But it's not quite that easy. There are seven main tax
classes: residential, multi-residential, commercial, industrial, pipe line, farm and
managed forests. Each of the tax classes has its own tax rate.
Of course, municipal taxes are not the only taxes we pay.
Education taxes are set by the province and are part of your municipal tax bill. County
taxes also make up a portion of your annual property tax bill. The county tax portion of
your tax bill pays for other items, such as ambulance services, social housing, social
services and roads which are not the responsibility of the municipality.
Finding out why your property tax bill has increased can be
tricky. While MPAC has an informative and interactive web site, it still, and rightfully
so, declares that it alone does not determine the amount of taxes you pay.
Your municipality, on the other hand, does use assessment
figures to establish tax rates. A small part of budget determination is left to
councillors; for the most part, existing operational figures are already entrenched. But
councils could do more to ascertain ratepayers' priorities, hold public budget sessions or
consider cost-saving alternatives. Likewise, county council, which holds day-time
meetings, could organize a series of public meetings each year when it considers its
budget; in 2003, county council's budget was $77.8 million. Actual 2002 costs were $73.8
million. Similarly, there is little, if any, local input opportunity for education taxes.
There is one significant difference between MPAC and the
three levels of government.
Property-owners can ask MPAC to reconsider assessment figures
or as a next step, if a property-owner is still dissatisfied, can appeal his or her
evaluation.
But there is no appeal process in place for any other aspect
of your tax bill. There is no recourse when it comes to actual tax increases. Taxpayers
can only request more access to the future decision-making processes and apply pressure to
the various levels of government so that they can have a say in how future decisions are
made.
That's not good enough. Taxpayers deserve a clear explanation
of their tax bills.
L.S.
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