MPAC is what I call an NGO (Non Government Organization). That means it has the right to create law without legislation.
Simply put they are a Government within a Government without voter input. They can add at will to our already existing 500,000 laws without so much as a whisper to our elected officials on a Provincial level.
MPAC’s board of Directors does have representation from municipal councils and commercial property owners, but not one from the residential sector. They are appointed I submit by their affiliations.
The Ontario ombudsman office, at the time, 2006, directed by Mr. Andre Marin, conducted an investigation that lasted some five months. “Never in the 30-year history of this office have so many complaints been received in so short a period of about a single public agency” state Mr. Marin. 3,700 complaints in four months.
Mr. André Marin, found that MPAC (Municipal Property Assessment Corporation) had failed to ensure property owners were provided with sufficient and timely assessment information to help them understand and challenge their property assessments fairly. He also found that MPAC had undermined the integrity of the Assessment Review Board (ARB) process. The ARB is an administrative tribunal under the authority of the Ontario Attorney General, established to hear appeals on property assessments levied by MPAC.
In his report, Getting it Right, the Ombudsman presented 22 recommendations that would:
- increase taxpayer access to MPAC’s information;
- improve the accuracy and consistency of property assessments; and
- improve the fairness and integrity of the appeal process.
The Ombudsman stated sharply that, “there is one fundamental flaw in our assessment system:
if a property owner challenges his assessment in a formal appeal, the onus of proof is on him. Challenging the state’s assessor is a David vs. Goliath mismatch – this is not a match-up, this is a slaughter…Putting the onus on the property owner is anachronistic, unfair and just doesn’t make sense.”
The Ombudsman emphasized that MPAC has to accept that, “appraisers are in the guesstimate business”. He therefore recommended that the Ontario government require MPAC to justify its assessments when a property owner makes an appeal to the Assessment Review Board.
Second, the Ombudsman asked the provincial government to review whether the public interest in MPAC’s secrecy about its computer program and database outweighs the public interest in full transparency and disclosure. Several submissions had shown that MPAC has resisted sharing information about the computer program and data that it uses in determining its appraisals.
At the end of the day that report got filed and Marin was replaced. Go figure!
The most daunting problem facing owners who challenge their assessments is to discover how these values are deter-mined. What comparable and recent sales were used? What are the assessments on similar properties? We all know that “comparable properties” is almost a fiction in Georgian Bay, where there are relatively few sales and where every cottage, point and island is different.
MPAC does not provide any information on the content and structure of the model, nor on how its staff use it. Property owners therefore do not know whether the assessment values are adjusted by the intuition and experience of appraisers. This makes it especially difficult to challenge one’s assessment. The Ombudsman’s report does give detailed attention to this issue; if MPAC responds accordingly, owners should have much more rigorous information on how their assessments are determined.
Theoretically, if every property assessment increased by, say 20 percent, and if the municipality did not increase its budget, there would be no increase in anyone’s tax contribution to the municipal budget.
But education tax is a different matter. The province requires a municipality to collect this tax revenue, which is then distributed across the province according to an education-funding formula. The provincial government sets a standard education tax rate that applies to all municipalities across the province. This rate is reduced following each assessment period to offset the provincewide average increase in assessment. But since assessment increases for most it exceeds the provincial average increase by a wide margin, the education tax portion of your property tax will itself be increased—regardless of the local council’s budget plans.
So if for no other reason, it is important to reduce your assessment to reduce the education portion of the property tax. (There are other avenues for your charitable giving to education!) The education tax rate for 2005 was .00296, or $2.96 for each $1,000 of your assessment. For example, on a $300,000 property, the education tax component was almost $900. So for each $10,000 reduction that you might achieve in your property assessment, there would be a reduction of $30 in the education tax, as well as another $60 to $75, depending on the municipality.
Hang on Martha we’re headin for the rhubarb!
Just for grins have a look at the report.