Author: Financial Awakening Blog
If you still haven’t read MPAC – Property Assessment and Tax or MPAC – The Wolf in Red Riding Hood, I highly recommend you to read it first.
assessment act
ARB Hearing
After you received a letter from ARB with the scheduled hearing date, you need to mark it on your calendar. It is probably going to be a month or 2 from the day you receive your mail, and it is extremely easy to forgot the date. If you do not show up in the hearing, you lose the case. Mark also on the calendar a few days before the hearing date so that you have enough time to prepare yourself for the hearing.
You may not win the case if you attend the hearing. However, you lose the case for sure if you do not even show up. It is really easy for one to chicken out a few days before the hearing. Be strong and don’t give up.
Preparation is the key
If you prepare yourself well, then you will have a lot less fear and it is going to be much easier for you to convince yourself to attend the hearing. You need to prepare the evidence (make sure you serve the evidence 21 days before the hearing day. I’ve seen people going to the hearing without knowing this and got sent home), the report and most importantly, yourself.
Process in the Hearing
If you read my other posts about MPAC, you will probably recall I mentioned pre hearing. There are 2 streams in the ARB hearing:
- Direct Stream
- Case managed stream
ARB reserves case managed stream for the high worth properties, such as malls ( I am talking about the owner own a whole mall). You are probably going to be scheduled to the direct stream. Under normal situation, they will schedule you right into the hearing. However, if you request, you can have a pre hearing first. In the pre hearing, you can request for discovery, and ask MPAC to provide you with information such as comparables that you pick (instead of those that they cherry pick). This is important because as a normal resident, we do not have assess to what MPAC has access to.
In the hearing, MPAC will present their evidence and then you can cross them with your own evidence. MPAC will then cross your evidence. After that, MPAC will summarize before you do.
There is a few things that you need to prepare before the hearing day.
- Serve the evidence you are going to present at least 21 days before the hearing.
- organize your evidence and how you are going to present.
- Check in the ARB rules and Assessment Act before you go to the hearing. You are going to use the assessment act to argue.
Some example of rules that you are going to need.
Assessment Act
http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90a31_e.htm#BK58
44(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,
(a) determine the current value of the land; and
(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land. 2008, c. 7, Sched. A, s. 13.
44(3)(b) stated that one can determine the current value of the land by comparing it to similar properties. One can then adjust the CVA of the property with refer to the similar properties if the adjustment result in a reduction. One point to note here is that this can only be done if it result in a reduction. The assessor cannot use this method to increase the CVA of your property. However, they can use the comparables to determine the CVA of your property if there is no other way to determine the current value.
Assessment base year
MPAC do a major reassessment every 4 years. The last one was 2008 and hence this year, 2012 is going to be the new assessment base year. The increased in assessment will be phased-in in 4 years. All the argument with MPAC will be based on the base year.
For example, if you purchased a property in 2011, and you are disputing the property tax for 2012, you will argue with MPAC based on 2008 CVA.
“current value” means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer;
In other words, if you have a recent arm’s length transaction for the base assessment year, then that is the best current value. The transaction will remain useful as an evidence to argue with MPAC if it is within one year of the base assessment year (ie 2008, 2012, etc)
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I like your site. Very informative.
I purchased a home in Aug. 2012 and took possession in Oct. 2012. I paid approx. $400k. I just received an assessment notice from MPAC for $650k as of Jan. 2012. This property is 30 years old and this is the first time it has sold. It was listed for almost 2 years.
I spoke with someone at MPAC thinking that it would be obvious to them that the property is assessed much too high. They wouldn’t budge. Now I am starting the process to challenge them. I believe your site will be very useful.
Thank you.»crosslinked«
Yes. MPAC is insane.
Make sure you read the case study part too. There are good case in there that you can use.
One important thing is that did you file the request for reconsideration with MPAC first?
For residential properties, you need to file that before you can go ahead with ARB.