Section B: Strengthening Ontario’s Property Tax and Assessment System

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The Province is working with municipalities, the Municipal Property Assessment Corporation (MPAC) and taxpayers to enhance the fairness and effectiveness of Ontario’s property tax and assessment system, which is critical to support local services and fund Ontario’s schools.

Ensuring Greater Consistency in Business Vacancy Rebate and Reduction Programs

As announced in the 2016 Budget, the Province introduced a legislative framework to give municipalities broad flexibility to refine their vacancy rebate and reduction programs. This greater flexibility will enable municipalities to better reflect their local circumstances and respond to concerns regarding the appropriateness of the lower tax level provided through these programs, and any unintended implications this may have for local economies.

Eighty per cent of municipalities that have decided to move forward with changes to the vacancy programs will phase out the municipal component by 2020. As a result, the government will be reviewing approaches related to the education property tax component of these programs in consultation with municipalities and the business community. The objective will be to align the Province’s approach with that of municipalities, while at the same time ensuring there is greater consistency across the province.

Finalizing Provincial Land Tax Reform

In response to northerners’ concerns about inequities in taxation and in how services are paid for in the north, the government announced a review of the Provincial Land Tax (PLT) in 2013.

While significant progress has been made with respect to establishing a fair and modern PLT system, the government is taking further action to address the remaining inequities. In particular, the government plans to address the differences in PLT between areas inside and outside school boards.

Once PLT reform is fully implemented, a single PLT rate of $250 per $100,000 of assessed value would be set for all residential properties, both inside and outside school boards. Businesses in unincorporated areas would continue to make a proportionate contribution to the PLT changes.

To ensure PLT rate adjustments are manageable for property owners, these changes would be phased in over four years.

The adjustments to residential PLT rates for each year are outlined in Table 5.2.

TABLE 5.2 Provincial Land Tax Annual Residential Rate Changes
(Per $100,000 Assessed Value)

Property Class 2018 Rate Change 2019 Rate Change 2020 Rate Change 2021 Rate Change
Residential:
Inside School Board
$5 $5 $5 $3
Residential:
Outside School Board
$40 $40 $40 $15

Encouraging Small-Scale Agri-Food Business on Farms

Starting in 2018, the government will support the growth of small-scale agri-food business on farms by enabling property tax changes to be made at the local level. This initiative will provide municipalities with the flexibility to tax the first $50,000 of assessed value of qualifying value-added and commercial activities on farms at a rate that is 75 per cent lower than the commercial or industrial tax rate that would otherwise apply. To support a level playing field with larger processors and off-farm businesses, this treatment will be limited to on‑farm processing and commercial facilities that are assessed below $1 million. This is a part of Ontario’s plan to encourage job growth in the agriculture sector and support rural economies.