In the fall of 2005, the Municipal Property Assessment Corporation (MPAC) announced an interim cut of 15% in the assessed value of Ontario non-profit housing co‑operatives for the 2006 tax year. This applied to all co‑op properties other than assessment parcels with six or fewer units.

MPAC took this action because the Ontario Region made representations to them about the lack of fairness and rationality in the assessment of co‑ops. Ontario members passed a resolution at the 2004 AGM calling on the Ontario Region to do this.

MPAC has now finalized the methodology that it will use to set the assessed property value for co‑ops in the 2007 tax year and beyond. Here’s how it will affect housing co‑ops:

• The average reduction in assessed values for housing co‑ops across the province will be just over 15% compared to the 2005 assessment.
• No co‑ops will see an increase in their assessment in 2007 or 2008. This is because of the freeze on assessments put in place by the Ontario government while it reviews the assessment system. However, the property taxes your co‑op pays might go up because of increases in municipal tax rates.
• Despite the freeze, about half of the co‑op assessment parcels will get another decrease in their assessed value (beyond the 15%). Some of these decreases will be significant. This will apply starting in 2007. If your co‑op is getting a decrease, it should have received a revised assessment notice last fall from MPAC with a lower assessment value.
• Unless there is a change in the assessment system, the remaining co‑op parcels will eventually get an increase in their assessed value but, as noted above, this will not happen until the 2009 tax year.
• Some of the proposed increases will be significant. The majority of co‑op parcels getting an increase will lose some of the 15% reduction they received - but will still have lower assessments than in 2005. But about 30 to 40% of the co‑ops parcels getting an increase will end up with an assessed value above what it was before the 15% reductions. Co‑ops getting an increase will get revised assessments in the fall of 2008.
• The increases or decreases will not affect Ontario-program co‑ops as long as they operate under the Social Housing Reform Act because property taxes are a pass-through under the funding formula.
• None of the above will apply to assessment parcels with six or fewer units, such as some units in scattered unit co‑ops.
• As noted, the Province has frozen assessments because of general concerns about the system. Their review could lead to major changes so that the present plans for increases starting for the 2009 tax year may not apply.

What is the Ontario Region doing?

1. We do not agree with some parts of MPAC’s new methodology and are trying to convince them to make changes to it.
2. Once our discussions with MPAC have been completed, we will ask them to give us the revised assessments for individual co‑ops facing increases and allow us to share them with co‑ops.
3. We will help co‑ops facing an increase. When we get closer to fall 2008 (when assessment notices are sent out) the Ontario Region will give you detailed advice on what to do. This may include common action on appeals. We recommend that you not make any commitment to an agent to do the appeal on a commission basis.

If your co‑op hasn’t received an amended, lower assessment this fall, you will likely be getting an increase for the 2009 tax year. What should your co‑op do?

1. When you are doing your financial planning, remember that the 15% assessment reduction is temporary.
2. You should consider appealing when you get you increased assessment (likely in the fall of 2008).

For more information, call Keith Moyer at the Ontario Region office at 1-800-268-2537 ext. 224 (416-366-1711 in Toronto). Or e-mail: kmoyer @ chfcanada.coop.