We strongly suggest that if you are involved in or are contemplating any property tax complaint that you hire lawyers or other consultants who are experts in the field.  This information is intended to provide a general description of the issues that need to be dealt with on an appeal and to help property owners or prospective purchasers understand the process of seeking a change in assessment.  On this page we have summarized the appeal process by discussing the following topics:

What is a Property Assessment
The Appeal Process
What Happens at a hearing
Evidence at a Hearing

When the ARB faces conflicting opinions on the value of a property, there is a natural inclination to rely on the opinion of an expert where there is any uncertainty.  Experts are not only respected by the Tribunal, but such experts usually are experienced in making an effective and coherent presentation of the evidence.  The experts and/or your lawyer will also cross-examine the assessor and challenging the evidence presented by the assessor.

The information contained herein is not intended as a substitute for legal or other advice and in providing this information we assume no responsibility for any errors or omissions.  We shall not be liable for any reliance placed on the information herein contained.

WHAT IS A PROPERTY ASSESSMENT

Generally speaking, notices of assessment are issued towards the end of each year with the deadline for an appeal being March of the next year (although there are exceptions particularly for "Omit" and "Supplementary Assessments").  The Notice of Assessment identifies the value at which the property has been assessed as well as the classification of the property.

Assessments are made by the Municipal Property Assessment Corporation ("MPAC").  MPAC is responsible for calculating the fair market value of a property ("Current Value Assessment" or "CVA").

For the 2006 tax year the Assessment of the property is determined based on the value as of January 1, 2005.

Taxes are calculated by each municipality by applying a tax rate (or percentage) determined by the City, against the assessment for the property.  If the Assessment is $ 1,000,000.00 and the rate is 10% then the taxes will be $ 100,000.  While appeals usually focus on the assessment calculated by MPAC, the classification of the property may at times also be in issue (depending on the circumstances there are other issues that may be raised before the ARB).  See "How Taxes are Calculated".

THE APPEAL PROCESS

After an appeal is filed, the Assessment Review Board ("ARB") will schedule a hearing date and provide you with written notice at least 14 days prior to the hearing (usually more notice is given).  The hearing is generally in the same municipality where the property is located.

For commercial properties in excess of $ 1,000,000 is assessment value, the ARB will usually schedule a pre-hearing to deal with procedural issues such as exchanges of information and written statements of issues.  In other cases a pre-hearing can be requested if you believe it appropriate to do so.

WHAT HAPPENS AT A HEARING

Usually there are several matters scheduled on the same day to be heard.  It is possible that not all matters that are scheduled will be dealt with and that some matters may have to be adjourned.  If you believe that your hearing will be lengthy, you should send a letter to the Assessment Review Board, advising them of the amount of time that you believe will be necessary for the hearing.  

At the beginning of a hearing the presiding member will explain how the hearings will proceed.  Usually consent matters or matters to be adjourned will be dealt with first.  In due course your matter will be called to be heard.

At the start of the hearing the assessor will give a description of the property in question, its address and location and an explanation of the manner in which the assessment was arrived at. The obligation of the assessor to give this introductory statement is provided for by the Assessment Act, Section 40 (8).  In practice this information is treated as being of a general nature.  If there is information presented by the Assessor that you disagree with you should cross-examine and challenge the Assessor.  For example if he presents evidence describing the property as having two residential rental units when it only has one unit, or comments on the condition of the property you may wish to ask him what the source is of his information and when, if ever, he last inspected the property.

• You will then be given a change to explain the reason for your complaint in detail.  You may present evidence and any witnesses you have.
• The MPAC assessor may question you and any witnesses who you presented.
• The MPAC assessor may then present evidence supporting the current assessment.
   
  • You may then question the assessor about the evidence that he presented.
  • MPAC may elect to present no evidence, if it believes that  the property owner has not presented an effective case.
• In some cases other interested parties (such as the municipality) may wish to participate in the hearing and present evidence - which you also have the right to cross-examine.
• After all the evidence is presented each party can make a closing statement.  This statement will summarize the evidence that has been given and explain why one parties evidence should be preferred to the other.  

• The ARB member will then either render his decision at that time or may "reserve" to consider the evidence and render his decision at a later date.  Generally if the member reserve's his decision, then the reasons for the decision will be in writing.  If reasons are delivered at the time of the hearing the decision will be oral.  If you wish to have written reasons you must request written reasons at the hearing or make a written request for written reasons within 14 days of the hearing.

If you do not agree with the decision of the Board you may within 30 days of the release of the decision ask the Board to review the decision.  As part of the process you must have requested written reasons and submit an affidavit outlining the reasons for the appeal.  A fee is required.  There is also a right to seek leave to appeal to the Divisional Court on errors of law. The appeal must be made within 30 days from the release of the decision to file.

EVIDENCE AT A HEARING

It is important to understand that the ARB  member hearing an appeal makes his/her decision on the basis of concrete evidence presented to him by both sides.  You cannot simply alleged that your assessment is too high, you have to prove it.

There are generally one of two strategies to take in seeking a reduction in your assessment.

 One is to argue that the January 1 2005 value was in fact less than calculated by MPAC.  
The other argument is that relative to other properties your assessment is still to high.  For example, if properties in your vicinity are generally assessed at a level of 10% less than their actual January 1, 2005 value then your property should be so assessed as well.

 There most common methods by which your properties value can be determined are:

An actual sale of your property is compelling evidence of its value.  You still need to show that the price is a fair price and that there are no circumstances suggesting otherwise.  How the Property was marketed and for how long before a sale took place should be part of the presentation.  For example the ARB may question whether a property purchased privately (for example from a relative) or under power of sale was purchased at fair market value.
The "comparable sales approach".  This method looks for similar properties in the vicinity that were sold on or close to January 1, 2005.  This ideal is a property identical to the "Subject Property" sold on January 1, 2005.  If you can identify such a property then the sale of that property provides compelling evidence of the value of your property. Usually such identical comparable properties do not exist and it is necessary to carefully identify the different features of the Subject and Comparable properties and to consider the impact of these differences on value.
The income approach is also often used, with investment properties, as the earning power of the property is an essential part of determining the property's value. Because of numerous adjustments that need to be made it is often used to support a conclusion reached on the basis of the comparable sales approach.  When looking at the income of the Subject Property it is important to "normalize" the statement to remove unusual items and add items for long term maintenance etc.  The income is then capitalized by multiplying the net income by a multiple usually appropriate for properties of this type.

Whatever method is used, it is important to ensure the accuracy of the information being relied upon.  Experts often physically inspect some or all of the "comparable" properties being relied upon to see if there are any distinguishing features or facts and sometimes speak to a party to the an actual sale being relied upon.  For example, an unusually high sale price may be due to a sale of the business being included in the price for the real estate.

A well documented and rational presentation of the estimate of value is essential to any effective presentation before the Assessment Review Board.