Do you know what your home is worth?

In Ontario, the value of property is supposed to be assessed every four years. Since 2016, properties in Ontario have not been reassessed, and at least for now, the provincial government has not authorized any plans to have properties reassessed. This means that 2025 property taxes are based on 2016 property values.

Eventually, the provincial government will need to give the go-ahead to the Municipal Property Assessment Corporation (“MPAC”) to reassess properties. This will likely cause the assessed value of residential properties to substantially increase, but as we explore further in this article, this may not necessarily substantially increase your tax bill.

While MPAC is not actively reassessing properties, MPAC continues to assess residential properties when new homes and condominiums are built. They also assess homes that have undergone substantial renovations or additions to the property.

As a homeowner, it is important to have a basic understanding of how property assessments work, how they impact your property taxes, and how you can appeal the assessment value of your home.

The Assessment Act (Ontario) sets out the basic rules for assessing the value of properties in Ontario. It provides the legal framework that MPAC follows when determining the value of all properties, including residential properties. MPAC uses these assessments to help municipalities calculate property taxes which fund essential services like schools, emergency services, road maintenance, and public transit.

A key principle of the Assessment Act is that properties are assessed based on their “current value” which means the price the property would sell for on the open market. The current value of the home is based on factors like location, size, and age of the building. You can read more about factors MPAC considers when determining the current value of a home on its website. How we assess residential properties | MPAC.

Even without a provincial wide reassessment, as a homeowner, you may still see changes to the assessed value of your home and it is important to understand what this means.

Changes in assessed value

A Property Assessment Notice (“Notice”) is typically sent out when there is a change in the assessed value of the home. It is important to review this carefully to ensure that the property details such as size, structures, and features are correct.

For example, if you renovated your home which required a building permit, MPAC is automatically notified which can prompt an in-person visit of your home for an assessment. Once the visit is complete, a Notice will be sent to you stating the current assessed value of the home.

It is also important to promptly review the Notice so that you can file an appeal on time. The deadline to file an appeal is stated on the Notice. Failure to file within the appeal period will result in the assessed value remaining the same as the Notice, which means you could end up paying more taxes than you should be because the home value was incorrectly assessed.

You can read more about when MPAC will issue a Property Assessment Notice on its website: Notices and Notifications | MPAC.

Impact on property taxes

It is a common misconception that an increase in your assessed value automatically means higher property taxes. While assessments influence taxes, municipalities set tax rates separately, based on the needs of each municipality. After an assessment, a homeowner’s tax bill is impacted when it is compared to the average change in value of the property type in the municipality.

What does this mean for your property taxes? If all properties in your area increase in value proportionally, then your tax bill might not change much. However, if your property’s value has risen faster than the average property in your area, you could see a higher tax bill.

On the other hand, if a municipality maintains the same tax rate or increases the tax rate, an increase in the assessed value will result in an increase to your tax bill. To provide stability in your tax bill, when the assessed value of the property increases, the increased value is gradually phased in over a three to four year period. Conversely, if the property value decreases, the lower valuation is immediately put into effect.

If you believe your property assessment is incorrect, you have the right to challenge it through an appeal process. Here’s how:

1. Review your assessment notice

When MPAC sends out a Notice, they will include the reason for the Notice.

If you receive a Notice, review it thoroughly and check that the property details are correct, as details matter. A house with 4 bedrooms, for example, would have a higher assessment than 3 bedrooms. The Notice will also state when you have until to file a Request for Reconsideration (“RfR”) with MPAC, which is a fancy name of the first step in the appeal process we referenced above.

2. Submit a request for reconsideration

An RfR is filed with MPAC when a homeowner believes the assessed value of the property is incorrect. This is the first step in the appeals process. This is a free, informal review where MPAC reassesses your property based on either the information you provide or by conducting an on-site inspection of your home. You can submit an RfR online through MPAC’s website or by mail.

The deadline to submit an RfR is noted on the Notice you receive.

When submitting a Request for Reconsideration, be sure to include:

1. A clear explanation of why you believe the assessment is incorrect
2. Supporting documents (e.g., recent sales of similar properties, appraisals, photos showing issues affecting value)
3. Any corrections to property details, if applicable.
   

Once MPAC reviews your RfR, a notice of decision is sent to you.

3. Appeal to the Assessment Review Board

After you receive MPAC’s notice of decision, if you are not satisfied with the decision, you can file an appeal with the Assessment Review Board, which is an independent tribunal that hears assessment disputes.

• The appeal with the Assessment Review Board must be filed within 90 days from the date of MPAC’s decision to your RfR.
• As part of the appeal, you will be required to submit an application form, the reason for why you disagree with MPAC’s decision on the RfR, and pay the required filing fee.
• Once an appeal is filed, the appeal will proceed through various steps which may include disclosure of information by both MPAC and the property owner, and filing a statement of issues and response which states each parties’ position on the assessment value. There is also typically a requirement to hold mandatory meetings and settlement conferences between the property owner and MPAC in the hopes of reaching a settlement before a hearing takes place.
• If a settlement cannot be reached, then a hearing will take place with a member of the Assessment Review Board.

A successful appeal in this type of case will require detailed information to support your reason for an appeal and solid supporting documentation. Property appraisers and lawyers can help you navigate through this process.

Whether you are receiving a Notice now because you are building a new home or substantially renovating an existing home, or once the Ontario government authorizes the re-assessment of all properties across Ontario, which could happen at any point, it is important as a homeowner to understand what the assessment value means and how it impacts your home and your taxes.

If you have any questions about how the MPAC process impacts your home’s value, you can contact KPMG Law LLP’s real estate team.