Sunday, December 14, 2008



There are few things more contentious than the assessment on your property, which is a key part in determining your municipal taxes. It's so difficult, the Ontario agency is almost in a lose-lose situation before it tackles, and fails, to determine accurately all the market values for all the properties in the 321 municipalities.
After all, there are around four million properties, so it's a formidable task for people who seem to have failed basic arithmetic. Or they may be just sloppy.
The problem is that if some bureaucrats screw up the assessments in your neighbourhood, every neighbour suffers because your property is judged by the value of all the other nearby homes, condos, shops and cottages. And if the assessments are too low on some homes, it means that home's owner is a freeloader on our taxes.
I have plenty of support for my argument that the Municipal Property Assessment Corporation is not doing a good job. Nope, not just the anguished stories that explode out of our newspapers and speciality publications like Cottage Life. MPAC, a non-profit agency, is just a decade old but has already been found wanting and condemned by its customer, the provincial government, thanks to damning examinations by its officials, and then came the scathing report of the independent ombudsman, Andre Marin.
But someone has to do the job. And, heaven knows, MPAC takes enough money from Queen's Park, more than $130 million annually, which helps run an elaborate appeal system. Is it needed! Too bad if you use a Mac, you're out of luck using any Internet links.
They err on both sides, too high and too low. I know of examples that will curl your hair even if you're bald.
Toronto's a mess, and cottage country is worse. Ratepayer groups are furious. I know of one property that sold a year or so ago for nearly $200,000. Obviously establishing a market value for that home is not hard, and that's a major fact in considering value at the crucial MPAC-decreed time of Jan. 1, 2008. Yet assessors, who knew that sales price, say the property is worth around $160,000. Then there's the house where the owners got a valuation a year ago of $330,000, but MPAC says the property is worth $100,000 less.
There are far more big increases, of course. On my cottage, of 300%. No, you didn't read that incorrectly. 300%!
Before I explain my horror story, let me emphasize the unreality about this entire process, which will determine the taxes we will pay until 2012. The foundation for what MPAC is doing rests on the assumption that the value of Ontario properties will stay the same or increase over the next four years.
Do I really have to point out that the value of 99.9% of the properties in Ontario has been sliding since Jan. 1, 2008, the point at which they fixed our assessments. Not only have the value of sales slumped dramatically, so have the number of sales. And it's only going to get worse when such giant employers as GM will either be closing or downsizing dramatically.
In my cottage area near Havelock, where many have commuted to GM jobs in Oshawa, not only will those homes and cottages be selling at lower prices, so will the homes dumped by city residents who won't be able to afford two properties when they're struggling to pay for one.
MPAC may want to argue that this won't matter since the same is true for all properties. Except councils will be slow to reduce the mill rates, which is the other factor for our taxes. Like almost all governments, those extra tens of millions will stick to the hands of the civil (?) servants and not come back.
Oh yes, about my own explosion in cottage assessment, which matches the horror stories in Cottage Life magazine. My assessment for Burnt Point on the Trent River was $76,000 on Jan. 1, 2005. I have the records. Except MPAC says it was $144,000. It appears this weird calculation is based on an assessment of $92,000 plus a new addition I built worth $52,000. Except MPAC knows that the addition was built and occupied after the crucial date of Jan. 1, 2008, because I had already appealed the occupancy date to MPAC and won. So the addition can not be used in the Jan. 1, 2008 calculation.
Yet MPAC decrees my cottage is now worth $226,000 for taxation purposes for the next four years. I have appealed, of course.
If I had made a string of basic mistakes like that as an editor or columnist, I wouldn't have lasted five decades in the media. The assessors shouldn't be free of the same performance demands that the rest of us face. Base part of their pay on the only market-value assessment figure that really counts, what properties actually sell for. Every time a property sells for less than what MPAC says is its market value, the assessors for that area are penalized and the taxpayer gets a rebate.
That's only a dream but it's better than this nightmare.

No comments: