Real Estate

MPAC assessment / change of ownership

  • Last Updated:
  • Aug 2nd, 2019 11:16 am
Deal Addict
Feb 25, 2007
1569 posts
1129 upvotes
Ottawa

MPAC assessment / change of ownership

Anyone know the ins and outs of the MPAC assessment process around an ownership change?

We bought some recreational vacant land in late 2018 for $X.
Our 2019 municipal tax bill is based on the 2016 MPAC assessment of about 1/2 $X.
Both of these are fair - the previous owner did significant work legally resolving access ROW issues and building a driveway, increasing the value of the property, but not anything requiring a building permit or otherwise triggering an MPAC reassessment. And other neighbouring properties, with less value added work done, have recently been selling at about 30% over their 2016 assessed values too.

When should we expect our property taxes to go up and how quickly?
Will the MPAC assessment "catch up" only in the regular reassessment cycle in 2020, with the increase phased in over 4 years after that? (That means 2021-2024 taxes, right?)
Or does the sale -- at a higher valuation -- trigger an immediate reassessment, presumably at or close to the amount we paid? And if so, will the increase hit us fully in next year's taxes or be phased in?

We have no problem paying our fair share of taxes, but for our planning want to know when the increase will likely hit us. And may explore managed forest and/or conservation designation to ease the burden with the right timeline.

I've read and tried to understand https://www.mpac.ca/HowAssessmentWorks/ ... mentUpdate, but am not sure if by virtue of the sale our property has "undergone a change" to trigger a pre-2020-cycle revaluation.
4 replies
Member
Feb 20, 2017
337 posts
106 upvotes
Barrie, ON
Where's the recreational land located that'll play a factor whether they spend time going to see it. Most of the time MPAC never goes to check on properties especially if land is in an area where it's mainly recreational land, no point for them.
Deal Fanatic
Jul 3, 2011
6517 posts
3798 upvotes
Thornhill
Essentially, the next valuation date will be Jan 1, 2020. MPAC will use the value of the property as at that date and based on known property values at that time to assess the value of every property. The value of the changes to your property post your purchase date will only be known if either the assessor visits or the changes were made through city/town.OMB authority.

That valuation amount even though it reflects current value, is assigned as the future value of the property 4 years hence. Thus, each year's assessed value is incrementally adjusted to get to the assessed value on valuation day starting with adjusting 2019's assessed value.

To do a simple illustration, assume the last assessment value (2019's) was $300,000. The value based on known property values at Jan 1, 2020 is $500,000, the assessment is presented like this:

2020 $350,000
2021 $400,000
2022 $450,000
2023 $500,000

Does that answer your question?
Deal Addict
Feb 25, 2007
1569 posts
1129 upvotes
Ottawa
licenced wrote: Does that answer your question?
It does and thanks, insofar you are saying the standard algorithm applies, no special/early revaluation occurs due to the sale, though of course the datapoint of the sale will affect the valution that will naturally be done in 2020.
Deal Fanatic
Jul 3, 2011
6517 posts
3798 upvotes
Thornhill
houska wrote: It does and thanks, insofar you are saying the standard algorithm applies, no special/early revaluation occurs due to the sale, though of course the datapoint of the sale will affect the valution that will naturally be done in 2020.
You're welcome.

The valuation is going to be the later of sale date or Jan 1, xxxx, in your case it will be Jan 1, 2020.

MPAC could have reassessed the value for the purchase price after you purchased it but they don't unless something significant is brought to their attention.

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