Here is an article from the Toronto Sun about MPAC
and its problematic property valuation system. The writer hits the nail on the head in
identifying three essential questions about the system: "...what has the value of our
home got to do with the cost of services we receive? How does it reflect our ability to
pay, especially if we haven't realized the gain? And what happens if real estate prices
crash?"
As well, of course, MPAC's valuation methodology is seriously
flawed and consequently there are huge swings from cycle to cycle on particular streets.
Pre-Hearing on October 15/04
Four property owners from the neighbourhood went to a pre-hearing which they had
requested.
MPAC had offered, in writing, to reduce the valuations for
the 3 residents on Ellis Park Rd by 8% which was the average "overvaluation" for
that street that MPAC would admit to. We knew that some individual properties had been
"overvalued" by much more. To avoid going before the Assessment Review Board for
a formal hearing, MPAC "negotiated" a 13.6% reduction for the 3 people from
Ellis Park Road, who had appealed.
There is, of course, no justice in this resolution for all of
the other residents on Ellis Park Road, at least. All other residents should have been
entitled to the same treatment but were not because they had not appealed their
assessments or had settled their appeals earlier.
The really sad thing is that MPAC itself suffers no penalty
for reducing the indiviual valuations as the refunds of taxes come from the already
cash-strapped City of Toronto.
This poorly-thought-out system has to go!
Two of the residents still have issues outstanding for other
properties. Their next pre-hearing date is February 15, 2005.
Toronto Sun article:
Make MVA Go Away
Assessments unfair, argues Linda Leatherdale by Linda
Leatherdale, Business Editor, Toronto Sun.
October 3, 2004
Across Ontario, homeowners are screaming over skyrocketing
property assessments. Some are heartwrenching stories of financial hardship and fear of
being turfed from their homes, because they can't afford rising property tax bills.
Especially hard hit are seniors on fixed income.
This insanity is thanks to the Tories, who took a flawed
property tax system with one of the highest tax burdens in the country, and made it even
worse with MVA (market value assessment.)
They told us it was "fairer and more equitable" as
they pegged our property tax bills to the current value of our homes. Of course, in a
record hot real estate market, values have been going through the roof.
Property taxes are based on a formula that includes the
assessed value and the municipal mill rate.
My beef is what has the value of our home got to do with the
cost of services we receive? How does it reflect our ability to pay, especially if we
haven't realized the gain? And what happens if real estate prices crash?
Well, here's more proof this system may be broke.
A married couple, who both work for the Municipal Property
Assessment Corp. (MPAC) in eastern Ontario, own a sweet piece of property in the country.
That property is currently up for sale by the owner and can be viewed at www.maplehillestate.com
The three-bedroom, two-and-a-half bath, single-family
detached home was built in 1992 and has 1,776 square feet of living space. The asking
price: $326,000.
Now, here's where it gets interesting:
The assessed value of the three-bedroom home, as of June 30,
2003 is $198,000. That's a gap of $128,000, or a 65% difference.
Mike Contant, MPAC account manager of municipal relations for
eastern Canada, stands behind the assessment.
"In relationship to all the other properties in the
area, it is fairly assessed," he said in an interview. But he added if the property
were to sell close to the listing price, that could trigger a review of the assessments.
He pointed out Kingston is a "robust market."
Contant was also adamant about this: "I can tell you,
absolutely, there is no influence because they are employees of MPAC."
Another assessment that could raise eyebrows takes us to
Toronto's upscale Bridle Path, and the estate of fallen media mogul Conrad Black.
The palatial mansion of 14,357 square feet includes five
bedrooms, nine full baths and two half-baths sits on 6.59 acres.
MPAC has assessed its value at $7.413 million, effective June
30, 2003.
Black bought the property in 1989 from his father for
$700,000. The home is not for sale, but appraisers have pegged its value at anywhere from
$15-to-$20 million, which is a minimum of 100% greater than the assessed value.
One tax expert, by the way, estimates a gap of $2 million
between the assessed and current value of the home means municipal coffers are forfeiting
$18,000 in property tax revenue.
Bottomline is, MPAC has been the target of many complaints --
and a memo from the corporation to municipal clerks and treasurers across Ontario this
past summer admits it.
The memo states MPAC has received complaints ranging from the
quality of its assessment and enumeration data, the accuracy of assessed values to
staffing levels, the cost-effectiveness of its products and services, plus the impact
annual assessments will have on taxpayers.
"It's important we listen to their concerns and we work
with our municipal partners," said Arthur Anderson, MPAC's director of municipal
relations.
Tomorrow, MPAC holds its annual meeting in Waterloo, in
conjunction with an Association of Municipalities of Ontario conference that kicks off
today and winds up Wednesday. Queen's Park, meanwhile, is giving MPAC more time to
complete its next round of assessments, with a deadline of Jan. 1, 2005.
My solution to this madness: Scrap MVA and go back to the
drawing board. In California, a property tax revolt led to Proposition 13. The time has
come for Ontario.